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Monday, 20 August 2018
Page: 7672

Tasmania Highway

Dear Mrs Wicks

Thank you for your letter of 18 June 2018 regarding Petition PN0352 on funding to travellers across Bass Strait, which was originally addressed to the Honourable the Speaker and Members of the House of Representatives.

The Australian Government currently operates two schemes to address the additional costs involved in transporting goods and people across Bass Strait: the Tasmanian Freight Equalisation Scheme (TFES), and the Bass Strait Passenger Vehicle Equalisation Scheme (BSPVES). Both schemes involve a substantial commitment of Australian Government funding in recognition of the unique geographical challenges faced by Tasmania.

The Australian Government has been providing assistance to alleviate the sea freight cost disadvantage incurred when certain categories of eligible non-bulk goods are moved by sea between mainland Australia and Tasmania since 1976 when TFES was introduced. In 2016-17, the Australian Government provided $137.6 million under TFES to offer Tasmanian industries equal opportunities to compete recognising that, unlike their mainland counterparts, Tasmanian shippers do not have the option of transporting goods interstate by road or rail.

The petition claims the original aim of the Coalition's 1996 Tasmanian Package was to remedy the impacts of Tasmania's 'isolation' by making Bass Strait ferries part of the National Highway and drive economic growth in Tasmania.

The Department of Infrastructure, Regional Development and Cities advised Mr Peter Brohier on several occasions in 2015 that the Australian Government in 2002 had made a policy decision to move away from the equalisation concept for the Scheme in favour of the provision of a flat per passenger vehicle subsidy.

Sea travel to and from Tasmania is important and is supported by the BSPVES. The BSPVES aims to reduce the cost of seagoing travel between the mainland and Tasmania, by providing a rebate for the transportation of an eligible passenger accompanied by an eligible passenger vehicle across Bass Strait. Despite its name, the BSPVES is not an equalisation scheme.

From 1 July 2017 to 31 May 2018 the Australian Government provided $43.9 million in assistance under the BSPVES. In 2016-2017 $47.8 million was provided under the BSPVES. From 1 July 2017 to 31 May 2018 the Australian Government provided a total of $166.9 million under the BSPVES and the TFES. In 2016-2017, the Australian Government provided $185.4 million under the BSPVES and the TFES. Rebates under the BSPVES are reviewed annually to reflect the change to the Consumer Price Index. The latest annual increase took effect from 1 July 2018.

On 13 March 2015, as part of its Response to the Productivity Commission Inquiry on Tasmanian Shipping and Freight, the Australian Government reconfirmed its commitment to the scheme. In so doing, the Australian Government reiterated that the aim of the Scheme does not extend to equalising the cost of inbound and outbound travel across Bass Strait.

At the same time, the Australian Government extended the TFES to goods going to other markets and trans-shipped through a port on the mainland. This decision provided an additional $202.9 million over four years from 2015-16 to 2018-19 for the TFES. It confirms that the Australian Government is firmly committed to addressing the unique challenges faced by Tasmania and strengthening Tasmanian business.

Mr Brohier of the National Sea Highway Coalition has been advocating for a broadening of the BSPVES based on the notion Bass Strait should be part of a 'National Highway Network'. Following the Australian Government's 13 March 2015 announcement for TFES, Mr Brohier wrote an article in the Mercury on 23 April 2015 claiming that 'a campaign for Bass Strait interstate transport equality, supported by business in two states, has failed to deliver despite resulting in massive federal funding'.

The ferry service between Tasmania and the mainland is provided by TT Line, a Tasmanian Government owned company. I understand that the Tasmanian Government has recently announced a proposal to replace the current ferries in 2021. The upgraded ferries are expected to significantly increase passenger and freight capacity.

Thank you for bringing the petition to my attention and I trust this is of assistance.

Yours sincerely

from the Minister for Infrastructure and Transport, Mr McCormack