Eric Hutchinson (Lyons, Liberal Party) Share this | Link to this | Hansard source

My question is to the Deputy Prime Minister and Minister for Infrastructure and Regional Development. Will the Deputy Prime Minister inform the House how expansion of the Tasmanian Freight Equalisation Scheme will allow Tasmanian businesses to compete on a level playing field and how this will support the Tasmanian economy?

Warren Truss (Wide Bay, National Party, Leader of the Nationals) Share this | Link to this | Hansard source

I thank the member for Lyons for his question and compliment him on his strong advocacy on these issues, together with his colleagues the members for Bass and Braddon. They have certainly been strong advocates for Tasmanian business. As a result, last week the government announced that it will continue the Tasmanian Freight Equalisation Scheme and extend it by a further $203 million to cover a $700-per-shipping-container subsidy for containers not covered by the current scheme, mainly containers destined for export.

This is an important step forward for Tasmania, and it has been warmly welcomed by Tasmanian business. As Rod Bender, the general manager of Norske Skog, said:

This is critical to operating a business in Tasmania cost-effectively and, more importantly, giving us access to markets that currently we can't ship to economically.

Clearly, as an island state, shipping services are absolutely critical to Tasmania's competitiveness. Almost 40 years ago the coalition introduced the Tasmanian Freight Equalisation Scheme to correct the difference that there is in freighting goods from Tasmania compared with the mainland states. This subsidy was intended to make up that difference. It has helped to meet some of the extra costs that businesses in Tasmania inevitably face because it is an island state.

But we will really have to do more to ensure the competitiveness of shipping from Tasmania and, indeed, from other states. Over the past decade Australia's freight task has increased by about five per cent per annum, but the volume of freight carried by shipping has decreased by 2½ per cent per annum. During the previous government's term, they introduced legislation which has had a devastating effect on the local shipping industry. It has cost jobs in the Australian shipping industry and, more than that, it has cost hundreds of jobs in land based industries, including in states such as Tasmania. Those job-destroying, bureaucratic reforms of the previous government are in fact undermining the effectiveness of Australian shipping. Indeed, the volume of ships on the Australian flag register has fallen by 64 per cent since Labor's initiative. Bell Bay Aluminium tell us that their freight went up 63 per cent in the year that Labor introduced its so-called reforms. Those reforms have been damaging to the Australian shipping industry, and we know that they have to be reversed if we are going to have a shipping industry capable of playing its role in Australia's important freight task.