Subjects: Labor’s $40 million freight support package for Tasmania.
Good morning everyone and welcome to our Deputy Prime Minister Anthony Albanese to Launceston and Minister David O’Byrne, and the members of the Freight Logistics Coordination team who have been working for some months now, in fact some time, with Government on trying to find solutions to help with the freight challenge that’s been facing business in Tasmania.
When you talk to business, freight is one of the biggest issues that they raise with you. Particularly for those who are exporting, not just internationally, but across Bass Strait as well.
And so this has been one of the key issues we have been trying to find a solution to. There is no silver bullet in relation to these issues. But what we do know is that there are things that we can do that will make this freight task easier.
So the $40 million that we’re announcing today is a joint effort by the Commonwealth and the State Government to help businesses find those solutions that will build efficiencies into their freight task, and help them to drive down costs, which will make them more cost competitive and ensure that they can continue to grow their businesses.
And most importantly, to grow jobs here in Tasmania.
This is very comprehensive work that has been undertaken by the Freight Logistics team and we’re confident with the $37.5 million grant program that will be available to businesses to apply for, that they will indeed be able to drive down those costs.
This is an exciting initiative, it’s also about ensuring that we are filling those empty containers that we know enter into Tasmania and exit Tasmania.
If we can fill those containers, that is one way that we will be able to drive those efficiencies. So one of the things we’ll be doing is coordinating as best we can the small businesses across the state to ensure that they’re using that empty space, they’re working together as businesses, rather than what tends to happen where everybody looks after their own freight needs and therefore it becomes quite expensive for them.
So we think we’ve got some very positive steps that we can take forward with this funding. We couldn’t do it without the Commonwealth. And I thank very much the involvement of the Deputy Prime Minister who I know has been working very hard with the Minister David O’Byrne to find a way through these issues.ANTHONY ALBANESE:
Thanks very much Premier. It is fantastic to be back in beautiful Tasmania again. This is my seventh visit this year. I’m a regular visitor here because the Federal Labor Government prioritises what needs to be done here in terms of growing Tasmania’s economy and jobs.
It’s fantastic to be here with my parliamentary colleagues Geoff Lyons, Dick Adams and Sid Sidebottom, with my State parliamentary colleagues, but also the members of the Freight Logistics team.
There’s one thing I know about infrastructure, transport and dealing with challenges, that is listen to what industry is telling you. That’s why we established the Freight Logistics Taskforce, that’s why we have listened and have taken on board the recommendations that they have.
They are in the best position to know a way forward. And this is a part of a multi-pronged approach. Just last month we had a $100 million announcement for the Tasmanian jobs and growth plan. What that was about was practical assistance for businesses to grow volumes in order to enhance export opportunities. Those practical measures will make a real difference.
Secondly we’re dealing with infrastructure. The investment in Burnie Port, the investment in the upgrade of Bell Bay, the investment in road and rail infrastructure, of which an important component regarding freight is the $120 million as a part of the Nation Building program we’re investing right here in Tasmania.
This announcement today is really a practical announcement. But it’s a practical announcement aimed at not spending a dollar and then it’s gone, it’s how do you spend a dollar to make a real difference in the long term.
Spending a dollar so you can have capital upgrades from industries in a practical way. A practical measure, which has been suggested, regards salmon farming. Now at the moment, because of the distances, the salmon has to be frozen. Because of that the demand for that salmon and the price of that salmon is reduced because there’s a perception about a reduction of quality once you fully freeze the product.
Now what we would look at as part of a possible proposal is semi-freezing, therefore improving the quality of the product, improving the demand for the product, improving the volumes of the product. Making a difference in terms of the long term.
What we will look at out of the $37.5 million is for practical proposals, capital upgrades that will produce a permanent outcome. And that is what the Freight Logistics team have been working on here.
Secondly as the Premier said, it is a case that we shouldn’t have empty boxes going across Bass Strait to or from. By using in particular the fact that this state is the first and greatest beneficiary therefore of the National Broadband Network, it provides opportunities to use information technology, proper coordination, to ensure that we maximise efficiency. So that is another step in terms of $2.5 million for smaller producers to cooperate and to make sure that we get better outcomes for everyone involved, but better outcomes importantly for the state and national economies.
I’m very proud of the work that we’ve done here in Tasmania. Whether it be the Jobs and Growth Plan, whether it be the record Nation Building infrastructure investment where we’ve just about tripled now investment in nation building infrastructure.
I say this as well, we’re committed to the Tasmanian Freight Equalisation Scheme, both strands. What Tony Abbott said when he was here last week – it will be interesting as to what he has to say today where he’s dropped in I think for a visit in Tasmania – he has said that TFES will be sent off to the Productivity Commission for review.
Now we know what the Productivity Commission think of TFES, they want to get rid of it. So that is his promise that he has made on his last visit to Tasmania. Does he stand by that? Or will he actually get on board this positive, practical plan.PHIL CLARK, CHAIRMAN, FREIGHT LOGISTICS COORDINATION TEAM:
Thanks Deputy Prime Minister. As the Deputy Prime Minister said, my group is made up of Tasmanian industry and our job is to come up with a long term freight strategy for Tasmania.
We’ve done a lot of work and we presented that work to Minister Albanese and Minister O’Byrne in a preliminary report. And we’d like to commend them. They’ve listened and listened from a very high level and they’ve come up with a funding package which is an absolutely essential part of the transition to a solution.
It’s a really good package. In addition to that they’ve up with a system for allocating the money, which is based on the Nation Building system, which is fair, which is equitable and which is transparent. And they understand as we understand the urgency.
So $25 million of the funding will freight Tasmania business before Christmas. It’s a great result. It’s a good day for Tasmanian businesses.GEOFF LYONS:
This is great news for freight in Tasmania. We’ve listened to industry and we’re really supporting them to grow in this region, in Tasmania. This is fantastic news and I want to really thank the Deputy Prime Minister for being here and making this announcement today.SID SIDEBOTTOM:
I just want to add to those words, to thank the Council and State and Federal Governments as well. I think what’s emphasised by this is that in Tasmania if we work together cooperatively and collaboratively we can reduce our costs, increase our efficiencies and make the system work for the whole of the state.DICK ADAMS
Today I was at a public forum and my opponent in the Liberal Party basically advocated for Filipino crews to be on the Bass Strait crossing and around the coast of Australia. I don’t think Australians want that. I don’t think Tasmanians want us to solve our freight problems that way.
I think we need these innovative ideas, which our group has come up with, and that’s about spending dollars to improve the infrastructure and the logistics of what we do and I believe that that is the way forward. And I’m really proud of this Labor Government’s initiative here in this area.DAVID O’BYRNE, TASMANIAN INFRASTRUCUTRE MINISTER:
This is one of the most crucial issues facing the Tasmanian economy. We are an export orientated economy and we rely very heavily on our freight and our exporters to build jobs and opportunities in Tasmania.
Now what you see very clearly is State and Federal Labor working together in a strategic way to respond to the needs of our economy. It’s about getting our road, rail and port infrastructure right. It’s about talking to our international exporters and driving productivity and efficiency and making our partnership a genuine partnership between government and industry.
Now Tasmania’s economy is building – particularly in our niche providers – in our small to medium enterprises. Through this funding package we will provide support to them to enable them to aggregate up there their freight task so they have a better decision and better choice in the market. Getting the market work for Tasmanian exporters, not against it.
There is a very clear choice here. You’ve got Federal and State Labor working together strategically at all ends of the supply chain to build Tasmania’s economy. And you have a Federal Liberal Party who want to refer it to a committee again, anther referral to a committee, an organisation that will trash the Freight Equalisation Scheme. And you’ve got a state party that just wants to give $33 million to a single international shipper, which will really only deal with five to ten per cent of the total freight task.
It’s a very clear choice. A strategic response, building a sustainable economy for Tasmania which is diverse, which is supporting our tourism, playing to our strengths and a Liberal Opposition in the State and a Federal Opposition that really don’t understand the needs of the Tasmanian economy.JOURNALIST:
Will this money (inaudible)ALBANESE:
What you’ve got to do, you can’t click your fingers and a shipping service appears. What you’ve got to do is increase the volumes, you’ve got to increase the efficiencies so that it becomes viable and the market determines what happens in terms of the shipping system.
So you can improve the long term efficiencies. That’s what this is aimed at doing precisely. Making it attractive to ensure that we have international shipping operating here from Tasmania; that’s the objective.
The interim report that we’ve received, we’ve adopted the recommendations and there’s more work to be done. This isn’t a task where you just tick the box and say job done.
We’ll continue to work, but the combination of measures; one, the jobs plan supporting industry in terms of growing volumes, two, the infrastructure improvements – Bell Bay, Burnie Port, road and rail freight as well. And thirdly though, the logistics tasks, which this is aimed at. Taking the recommendations from the experts. How do we make capital improvements with the money available, we would anticipate that there would be contributions of course from the specific businesses as well. But this is a substantial commitment.
We are bringing forward funding so that $25 million is available right now, between now and Christmas. We know that it’s possible for that to be used because this process has identified a number of practical plans. It will be a competitive process, submissions with both departments but also with a process of someone – at least one person from outside – to advise on exactly what the best projects are going forward.JOURNALIST:
Can you give us a bit more detail on the kinds of applications that you would expect to get for that $37.5 million. What will they be doing. ALBANESE:
I’ve given you one in terms of salmon and where that could work. Other possibilities are how you improve capital equipment at a factory, at a plant, that is putting produce into boxes, how you do that more efficiently so therefore you grow the volume. There have been a couple of other suggestions for specific companies that have been looked at.
What we know is from the taskforce is that there are these practical measures out there. If you have a company that knows it needs – to use a figure at random - $5 million to upgrade the factory, once that was done it would produce higher output, which would lead to higher volumes, which would increase the freight task, which increases the efficiency, which lowers the cost.
If you can do that, but the company can’t do it by itself because of the position it’s in – of finding the $5 million for the capital upgrade, then I think there is a role for Government to provide that support for industry. Because what it does is produce a return. It produces a return for that business, but it also produces a return for the Tasmanian economy. Because we have more people at work, more economic activity, which produces revenues to government.
So it’s a matter of being prepared to make sure that we provide that support for industry where it will make a real long term difference. So that’s the sort of tasks that we’re looking for; capital upgrades. So one-off funding for a particular commitment, but that will make a long term difference in terms of the freight task.
We know from the experts who are here that that is possible. And I’m really excited about this because I think the model that is going on here, and I congratulate all those involved, these local members, Tasmanian State Government and industry, who have been prepared to sit down and work through these issues in the interests of the state and the nation.JOURNALIST:
There’s a question about freight equalisation, that it favours produce being shipped and processed in Victoria rather than processed and exported direct from the state. What would you do about that?ALBANESE:
The problem is that we don’t have ships that are going internationally. That’s the practical problem that’s there.
With regard to TFES, we remain absolutely committed to supporting freight equalisation. We are the only party at this election who is committed to it. Our opponents, Mr Abbott has made it very clear, a Productivity Commission review. He may as well put it in the savings box now.
And we know that Tony Abbott has got to find $70 billion of cuts. That’s why he’s hiding his costings because we know what will have to come in there. And when you announce a review of support for industry, for the Productivity Commission, when the Productivity Commission just prior to Labor being returned to government federally, has already made its position clear. They’ve had a review, they’ve got a position, they think it should be gotten rid of. Tony Abbott wants to send the TFES processes to the Productivity Commission.JOURNALIST:
You mentioned just a minute ago that there’s no international ships coming in, and that’s (inaudible). Why haven’t you been ready to put this money - $25 million before Christmas – into trying to attract an international operator?ALBANESE:
That’s exactly what we are doing. That’s exactly what we are doing. You’ve got to increase the volumes so that you attract the market to run shipping from Tasmania. That’s what you have to do. We don’t have a Government ship or shipping line. So we can’t call -JOURNALIST:
There are people out there though who would operate such a line for you, why not put money directly -ALBANESE:
We don’t have a Government shipping line. If you give money for a specific operator to undertake a task, that money is gone once it’s spent. What you need to do is to build up the export volumes, deal with what the real challenges in terms of the freight logistics task rather than to subsidise any particular operator.
Now, by doing that – and there’s commercial interest as well – the fact is suppliers have contracts with shipping companies, with freight logistics companies, such as Toll and others. So you can’t simply operate in a market system because there will be action against you. So you need to come up with real solutions. This is about real solutions for the Tasmanian freight logistics industry.JOURNALIST:
That’s exactly what the State Liberals are doing, they’ve committed in $33 million and they said that would attract an international shipping line.ALBANESE:
Well good luck with that.O’BYRNE:
They would put $33 million of taxpayers’ money into (inaudible). They won’t control the price; they won’t be able to build in sustainable solutions. It’s a band aid solution and (inaudible). And if it’s such a good idea, why hasn’t the team recommended it. Because it’s not a great idea.ALBANESE:
And when the money is gone, it’s gone. What you need to do is invest taxpayers’ funds where it makes a difference in terms of change. It’s very easy to just spend money and then it’s gone.
One of the reasons why I love being Infrastructure Minister is that you make a difference long term. Once the $4 million is spent at Burnie Port, you know what, it keeps going. It keeps producing a return. That’s why you deal with these issues in the way in which we have.
Industry understands it. The State Government and Federal Government understand it. That’s why we’ve taken this approach and taken it on the recommendations of industry.
I tell you what, what you don’t want in politics – whether it’s Canberra or Hobart – is these things being determined by politicians talking to each other in a room. It seems to me that that is what the Tasmanian Liberals here have done.JOURNALIST:
$40 million over how long, Mr Albanese?ALBANESE:
It’s over two years. So it’s about getting that capital upgrade and then obviously there will be assessments as to that. But it’s front-end loaded because what the taskforce have said is that there are a number of projects that would be worthy, that are ready right now.
So that’s why $25 million is being made available immediately. Prior to Christmas we will have a process and applications will be called for through that process.JOURNALIST:
How many exporters might benefit?ALBANESE:
We won’t pre-empt the process. But there is $37.5 million and $2.5 million looking at small suppliers. We think that could be very many in terms of using that $2.5 million to establish processes so that you can have better coordination. So no one will be excluded from that process.
We think this could benefit the entire state in terms of producing outcomes. With regard to the specific grants, what we want is an arms’ length process. You don’t want politicians determining that either. What we’ll have is a process whereby our respective governments will work with a member or members of the freight team to make recommendations, (inaudible) and then we’ll make a joint decision just as we did on the Jobs and Growth plan.JOURNALIST:
What if you put all this money into the businesses and helping build up their infrastructure and help them -ALBANESE:
That’s what we’re doing. That’s what the $37.5 million is for.JOURNALIST:
What if they do that and then we still don’t have a regular shipping service to take all their stuff out.ALBANESE:
You can’t wish. I wish a ship comes and it takes the task for a period of time. You can’t do that.JOURNALIST:
So what if it happens. You spend all this money and you still haven’t got a shipping service.ALBANESE:
I am very confident. I am absolutely very confident that this will be successful. It will be successful because we’ve actually listened to industry. And we haven’t listened to any sectional interest either. This isn’t a single rent-seeker seeking a dollar. What this is is a plan for the whole state, listened to industry and I make no apologies for taking that approach. JOURNALIST:
How much is State Government money in there?GIDDINGS:
This is a joint funded initiative. So basically $20 million of the $40 million is State Government funding. But this really is to help ensure that we have long term sustainable solutions to this problem.
What we’re trying to achieve here is long term sustainability, to ensure that we can drive down costs, that we can support our exporters and that we deal with the modern realities of shipping as it is today. JOURNALIST:
If Federal Labor’s not re-elected will you continue to spend $20 million?GIDDINGS:
We will continue to work with the Freight Logistics council on what we can actually achieve to help Tasmanian businesses. Of course with the promise that we’ve got from Federal Labor, this is a huge step forward for us. If that is not realised, we will work very closely with the team and ensure that we can do everything we can within our own power to help this problem for Tasmanian businesses. But we can’t do it alone. We do welcome the Federal Government’s support.JOURNALIST:
Can I just ask Mr Clark, has your team tested to see whether there are international operators who would come in given the volume that you’re expecting to have from this new investment of money?CLARK:
The position is that we’re out talking to the shippers now and the two messages that I’m getting from them very clearly are we’d be mugs to tell them where to go and we’d be really stupid to give them a lot of money to put in their pocket. Because they’d be here for three years and then gone.JOURNALIST:
What do they want?CLARK:
They have a black box solution. The way we’re going to get an international shipper in Tasmania is by somebody getting a break in Shanghai, somebody getting an extra berth in Dubai. It’s not going to be a solution that you or I can come up with, it’s a solution that they come up with.JOURNALIST:
Do they need a particular volume though?CLARK:
They do need a particular volume, and the volume we’ve got at the moment is a bit low. The other problem we have is the import volume is a little bit low. One of my colleagues has been working on that. There’s a substantial volume that Woolworths and Coles import into Tasmania, but they could send 25,000 containers a year from China, just those two businesses.
If we had those coming in then an increase in volume going out, we’ve got the problem fixed.JOURNALIST:
Is this what you asked for in the interim report, or have you had to compromise?CLARK:
We asked for a four year program. We’ve got a two year program, otherwise we haven’t compromised at all. But the think I like about it is one, it’s front-loaded and two, the money is going to get out there quickly.JOURNALIST:
What do you mean it’s frontloaded?CLARK:
It’s frontloaded in the sense we get to spend more early when we really need it. JOURNALIST:
Are you saying the industry is effectively written off the State Liberal Party’s (inaudible)CLARK:
No, I’m not saying that at all. I’m just saying it’s not a very smart idea to put a whole lot of money in a big international shipping company’s pocket. JOURNALIST:
Why were you asking for a four year program?CLARK:
We thought four years would probably get us through the transition the Premier mentioned. This is a long term plan and there are a lot of elements. Shipping is about five per cent, international shipping is about five per cent of the issue. Bass Strait is the issue. It costs three times as much to get across Bass Strait as the equivalent road journey from Adelaide to Melbourne. Three times as much; that’s the big issue. The shipping thing, which is a very heavily (inaudible) issue locally I know, is a small part of the problem (inaudible) and coordinate the rail, and coordinate the road, get the ports working properly (inaudible).JOURNALIST:
How much less could it cost exporters who are successful in getting funding under this plan to get their products across Bass Strait? Is there an estimate of how much they might save on what they are currently spending?CLARK:
Well it’s going to vary from exporter to exporter. But the range of prices across Bass Strait is enormous; it runs from about $600 or $700 per container for the really big producers up to about $1,800 for a small producer. And those small producers are people we particularly want to focus on. And that’s a particular focus of the proposal.JOURNALIST:
How much of an impact does the two year compromise have – will it affect the plans?CLARK:
I would expect there’s a review in two years. And if we can deliver some results, and we can show that those investments make a difference, I’ll be asking for more.ALBANESE:
Which is precisely the plan. ENDS