A MULTIMILLION-dollar subsidy earmarked for an international shipper will be funnelled into other infrastructure projects if plans for a direct Asian link are sunk, Premier Will Hodgman says. The state government has promised Singapore-based Swire Shipping $33 million if it can provide a viable international freight service. READ MORE: Hidding warns Victoria off state's windfall But a significant expansion of the Tasmanian Freight Equalisation Scheme, which will now see all containers of produce shipped from Tasmania receive a $700 subsidy, has cast doubt over the deal. The government and Swire struck a preliminary deal late last year, paving the way for the company to conduct market testing in Tasmania. As of yesterday, the company said it was still engaging customers and exporters to determine the feasibility of establishing a service. The memorandum of understanding will expire at the end of this month. Mr Hodgman said yesterday it was clear the extension of Bass Strait subsidies was a game changer. "There is no doubt that the significant injection of funds into the TFES has changed the landscape," Mr Hodgman said. "It is important also to point out that no money has changed hands, and no money will change hands, unless both parties agree on a deal that is cost-effective and sustainable." Mr Hodgman said it would be premature to walk away from the MoU without allowing Swire to finalise its work. "The ball is in Swire's court to determine whether there is sufficient demand to introduce a new international service," he said. "If no agreement can be made, it will remain in place for job-creating infrastructure." Opposition Leader Bryan Green said the public money must be spent on repairing damage done to frontline services. "There are opportunities to put money into infrastructure, no doubt," Mr Green said. "But at the end of the day we've got a serious situation with under-resourcing in the public service now, which is having a dramatic effect on services and the morale of staff."
A MULTIMILLION-dollar subsidy earmarked for an international shipper will be funnelled into other infrastructure projects if plans for a direct Asian link are sunk, Premier Will Hodgman says.
The state government has promised Singapore-based Swire Shipping $33 million if it can provide a viable international freight service.
But a significant expansion of the Tasmanian Freight Equalisation Scheme, which will now see all containers of produce shipped from Tasmania receive a $700 subsidy, has cast doubt over the deal.
The government and Swire struck a preliminary deal late last year, paving the way for the company to conduct market testing in Tasmania.
As of yesterday, the company said it was still engaging customers and exporters to determine the feasibility of establishing a service.
The memorandum of understanding will expire at the end of this month.
Mr Hodgman said yesterday it was clear the extension of Bass Strait subsidies was a game changer.
"There is no doubt that the significant injection of funds into the TFES has changed the landscape," Mr Hodgman said.
"It is important also to point out that no money has changed hands, and no money will change hands, unless both parties agree on a deal that is cost-effective and sustainable."
Mr Hodgman said it would be premature to walk away from the MoU without allowing Swire to finalise its work.
"The ball is in Swire's court to determine whether there is sufficient demand to introduce a new international service," he said.
"If no agreement can be made, it will remain in place for job-creating infrastructure."
Opposition Leader Bryan Green said the public money must be spent on repairing damage done to frontline services.
"There are opportunities to put money into infrastructure, no doubt," Mr Green said.
"But at the end of the day we've got a serious situation with under-resourcing in the public service now, which is having a dramatic effect on services and the morale of staff."
