Bass Strait is an expensive stretch of water, and the federally-funded freight equalisation scheme is not bridging the economic divide, as BARRY PRISMALL reports.
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THE $114 million Tasmanian Freight Equalisation Scheme and its sister $41 million subsidy for TT-Line passenger vehicles is the Commonwealth's recognition of Tasmania's peculiar island disadvantages.
You could add to that $26 million in 1984 when then prime minister Bob Hawke gave us money to buy the passenger ferry Abel Tasman and maybe the $1 million wheat subsidy, but after that you're scratching.
The Commonwealth spends billions of dollars on rail and road links between major national centres, but take a look at the current state of the Midland Highway, a ``national highway'' and you can see how we are being dudded.
Even with the Abel Tasman ``gift'' the Commonwealth was able to save losses of $2 million a year by withdrawing the federally owned ANL shipping run.
The $26 million for the new ferry in 1984 was a dirt cheap substitute, and recouped within six years.
There's virtually no recognition of the Bass Strait factor.
Federal bureaucrats for years have said the Commonwealth doesn't compensate islands, as if Tasmania is not a sovereign state.
Melbourne lawyer Peter Brohier has been fighting his own battle to achieve ``equalisation status'' for Tasmania.
The freight scheme uses the word ``equalisation' but according to Mr Brohier the annual payment would be more like $300 million if the word meant anything.
Mr Brohier said the freight and passenger vehicle schemes didn't deliver anywhere near comprehensive ``equalisation'', based on highway travel cost equivalence.
The scheme subsidises mainly northbound freight, but the withdrawal of international shipping from Bell Bay has forced Tasmanian exporters to use Melbourne, which wants to hit our exporters and freight forwarders with a new levy that will cost Tasmanian business up to $15 million.
On top of that the freight equalisation scheme does not compensate for international exports.
State Infrastructure Minister David O'Byrne has been quietly working away since June last year to convince his federal counterpart Anthony Albanese to add international exports to the scheme, which could be worth up to $30 million for Tasmanian exporters, who are also being dudded by the impact of a high Aussie dollar.
``We have put a proposition to them that would extend the TFES to exports and save on local costs by up to 50 per cent'' Mr O'Byrne said.
``It would not unduly impact on the federal budget and we believe it can be included within the current budget.''
Tasmanian Farmers and Graziers chief executive Jan Davis said farmers were mostly worried about the loss of an international carrier at Bell Bay and the carbon tax starting on July 1.
``The tax on diesel won't apply to roads for three years but it will apply to shipping from July. It will hurt because 70 per cent of what the farm sector produces is exported,'' Ms Davis said.
``As well, we will be hit by the Victorian levy, but again, the inputs for farmers such as fertiliser and construction material coming south are not covered by the TFES,'' she said.
Mr O'Byrne believes the state might get somewhere with extending the scheme to international exports because it was reasonable in a budget context but at the same time would be of great help to local business.
``We are dealing with an issue which the Productivity Commission in 2005 wrongly described as a rort, so it's a careful path we tread. I believe we can do this within the existing budget,'' Mr O'Byrne said.
