Nov 5, 2008

Freight subsidy schemes to continue: assistance for Tasmania

Freight subsidy schemes to continue: ongoing financial assistance for Tasmanian industry

MEDIA RELEASE

The Hon Anthony Albanese MP

The Minister for Infrastructure, Transport,

Regional Development and Local Government

Leader of the House

Member for Grayndler

November 5 2008

The Rudd Labor Government has moved to provide long term certainty to Tasmanian industry by deciding to retain the Tasmanian Freight Scheme and Tasmanian Wheat Freight Scheme in their current forms.

This decision was reached after careful consideration of both the 2006 Productivity Commission Inquiry Report and the Tasmanian Freight scheme parameter review draft report (September 2008) prepared by the Bureau of Infrastructure, Transport and Regional Economics (BITRE).

The schemes subsidise Tasmanian industry for the disadvantage caused by having to move cargo across Bass Strait by sea, compared to road transport. The BITRE analysis indicates that road freight costs have increased significantly more than sea freight costs over the past decade.

Adjustments to the parameters would significantly reduce overall assistance levels resulting in a significant negative impact on Tasmanian businesses at a time of global financial uncertainty.

The Tasmanian Freight Scheme is critical to Tasmanian industry. Accordingly the Government has agreed to maintain current levels of assistance and use the parameters which have been in place for the past 10 years.

In 2008/09, the Government has made available more than $101 million in funding – assistance which is contributing to the continued development of Tasmania.

A range of administrative changes designed to improve and strengthen the accountability of the schemes will continue including better auditing and compliance arrangements and upgraded IT systems.

These changes are important to safeguarding the integrity of the Tasmanian Freight Scheme and Tasmanian Wheat Freight Scheme.

The Schemes will be reviewed again in 2011/2012.

The BITRE report is now available at www.bitre.gov.au and the Productivity Commission report is available at www.pc.gov.au.