The Tasmanian Government is backing calls for immediate action to increase payments under the Tasmanian Freight Equalisation Scheme (TFES) to level the playing field for local producers and manufacturers.
Key industry groups the Tasmanian Chamber of Commerce and Industry (TCCI) and Fruit Growers Tasmania have highlighted the need for immediate changes to the Commonwealth scheme ahead of a full review.
Minister for Transport and Minister for Business, Industry and Resources, Eric Abetz, called on the Federal Labor Government to take immediate action to ensure payments under the scheme are fair.
"As an island state, Tasmania relies on sea freight to move 99 per cent of our goods, with the cost of shipping directly impacting on the cost of doing business and the cost of living," Minister Abetz said.
"Shipping has inherently high fixed costs across short distances, which is expensive when compared with road and rail transport. Tasmania does not have the luxury of these cheaper alternatives.
"As the TCCI and Fruit Growers Tasmania make clear, these costs have increased significantly in recent years and payments under the TFES have failed to keep up.
"I have made all of these issues abundantly clear at the Senate Select Committee inquiry, reinforcing that any changes to the TFES must ensure Tasmanian businesses should be no worse off.
"Tasmanian manufacturers and producers are at a disadvantage compared to their national and international counterparts and it is getting worse with every day of inaction by the Federal Labor Government."
Minister for Primary Industries and Water, Jane Howlett, said the current arrangement must be modernised.
"TFES assistance rates for our farmers and agribusinesses have not changed since 1998 and do not reflect increasing Bass Strait shipping costs, the problem exacerbated further in times of feed and fodder shortage from drought," Minister Howlett said.
"I am calling on the Federal Labor Government to immediately increase payment rates, preceding a full review of the scheme as recommended by the Senate Select Committee on TFES.
"An important part of our 2030 Strong Plan for Tasmania's Future is to back our local communities so they can grow their economies, create jobs and ensure Tasmanians can work and raise their families and live in our regions.
"The Federal Labor Government need to acknowledge their responsibility and address this issue to ensure that Tasmanian producers, businesses and our economy can continue to thrive and grow."
