The government has announced plans to take two $40 million dividend payments from the company to put into a fund to replace the two vessels in ten years.

Labor finance spokesman Scott Bacon used Parliament on Wednesday to quiz Mr Hidding over when the decision was made, accusing the government of using the funds to make the budget look better than it was.

“The government must reveal when the decision was made to transfer that money to state coffers, particularly given that in December he said that “the TT-Line board has its own processes in-house for ship replacement preparations.”

“It is becoming increasingly clear that the Liberals were desperate to deliver a surplus and cooked up this dodgy deal to transfer capital from TT-Line.

“How close to the budget going to the printers was this decision made?”

Mr Hidding said discussions about special dividend payments started in November, and were later discussed at the first meeting of the cabinet subcommittee on ship replacement. 

“The Spirits of Tasmania are key elements of Tasmania’s future tourism and freight needs,” Mr Hidding said.

“The government’s policy on the Spirits has been an unqualified success, generating a big increase in passengers and vehicles through the refurbishment of the vessels, lower average prices and a big increase in  day sailings,” he said.

Laws will be passed to ensure the funds can only be used for replacement vessels.

A budget surplus is expected on Thursday.