Federal support for Tasmania’s freight and passenger maritime services needs to be improved, the Productivity Commission says.
However, the Commission’s draft report says that proposed changes, and indeed the schemes themselves, could not meaningfully address Tasmania’s underlying competitiveness and fundamental economic challenges.
The draft report, Tasmanian Shipping and Freight, examines the competitiveness of Tasmania’s shipping and freight services, and assesses the effectiveness of the State’s freight and passenger subsidy schemes, the alignment of their objectives and outcomes, and their relationship to broader Tasmanian transport and economic issues.
The Commission found deficiencies in the design and operation of the Tasmanian Freight Equalisation Scheme (TFES), Bass Strait Passenger Vehicle Equalisation Scheme (BSPVES) and the Tasmanian Wheat Freight Scheme (TWFS).
Commissioner, Karen Chester said the design and administration of the current subsidy schemes were out-dated, resulting in outcomes not well-aligned with the schemes’ underlying objectives.
Tasmania services slammed
“The embedded administrative complexity also gives rise to anomalies and some perverse incentives,” Ms Chester said.
She said that in view of the Australian Government’s stated intention to retain the TFES and BSPVES, the Commission’s preliminary recommendations for improvement included TFES payment rates to be based on contemporary data and regular parameter reviews and that the payments be made on a flat-rate basis per 20 foot equivalent unit.
Ms Chester said a threshold should be required for the minimum value of claim line item
and that the Government’s foreshadowed review of coastal shipping regulation to reduce the cost of Australian shipping and the impost on business, especially Tasmanian business, be expedited.
“The Commission also proposes that broader policy initiatives and reform are needed to address the widening gap between Tasmania and mainland jurisdictions and address lower income growth and labour productivity, higher unemployment rates and social disadvantage,” Ms Chester said.
She said there were State issues related to the efficiency of Tasmanian shipping and freight. These included rationalising infrastructure assets, which should be addressed in the proposed integrated Tasmanian Freight Strategy.
The Commission is seeking comment on this draft report and invites written submissions by 7 February. A final report will be submitted to the Australian Government in early March.
The draft report can be viewed at this PS News link.