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Report on performance

Outcome 2-Transport Outputs and Programs

Output 2.3.1-Surface transport policy, programs and regulation

Highlights

The Department managed the extension of the Tasmanian Freight Equalisation Scheme to King Island and Flinders Island, as well as implementing Australian Government decisions to increase the rebates available under the Bass Strait Passenger Vehicle Equalisation Scheme.

The Department worked with the Australian Maritime College and the University of Tasmania to facilitate the integration of these two high-calibre educational facilities from 1 January 2008.

Overview

Output 2.3.1 is delivered by the Infrastructure and Surface Transport Policy (ISTP) and the National Transport Strategy (NTS) business divisions. ISTP focuses on the development of maritime transport policy and regulation and integrated vehicle and road transport reforms to achieve efficient, productive, safe and sustainable outcomes that are environmentally friendly and enhance Australia's international competitiveness. NTS works with state and territory governments and other stakeholders to help develop and deliver an agreed national transport policy. Unless otherwise stated the narrative in the Output 2.3.1 section of the report refers to the work of ISTP.

In 2007-08, the output administered 10 programs:

  • Australian Maritime College - marine research funding project;
  • Bass Strait Passenger Vehicle Equalisation Scheme;
  • International Maritime Organization - contribution (refer page 174);
  • Interstate Road Transport Fees;
  • National Transport Commission;
  • Organisation for Economic Cooperation and Development Road Transport contribution (delivered by the Bureau of Infrastructure, Transport and Regional Economics - refer page 174);
  • Oil Pollution Compensation Fund;
  • Payments to the Maritime Industry Finance Company Limited;
  • Tasmanian Freight Equalisation Scheme; and
  • Tasmanian Wheat Freight Scheme.

Output 2.3.1 corresponds to Output 1.4.1 in the previous outcome and output structure, excluding the vehicle safety standards aspects of that output, which are now reported under Output 2.3.2 (see Appendix L for a comparison between the current and previous structures).

Table 4.10 summarises the output's performance in 2007-08.

Summary of performance

Table 4.10 Summary of performance - Output 2.3.1 - Surface transport policy, programs and regulation

Performance indicators Results
Effectiveness

The maritime and land transport industries operate in a robust and stable regulatory environment.

The Department addressed competition issues in coastal and international liner shipping trades through participation in review activity and further regulatory reform. It also undertook action in the area of shipping environment protection.

The Department also pursued land transport regulatory reform to facilitate continued heavy vehicle productivity and safety improvements. Work streams in this area include:

  • work to promote national uniformity of heavy vehicle regulation across the states and territories through supporting the work of the Australian Transport Council, National Transport Commission and Austroads;
  • review of existing legislation to promote safety and productivity outcomes such as the development of new fatigue regulation, new enforcement models and further work on performance based standards;
  • extensions to high-productivity vehicle networks; and
  • government agreement to a new safety and productivity program to support the introduction of new fatigue regulations and extensions to high-productivity vehicle networks.

The COAG national reform agenda for transport is actively progressed in conjunction with all Australian governments.

With representatives of the state and territory governments, the Department commenced work on a single national approach for maritime safety regulation, with a view to reporting to the Council of Australian Governments (COAG) by the end of 2008.

Price

$17.4 million

The actual price of this output in 2007-08 was $16.7 million.

Overall performance Fully achieved.

Detailed report on performance

Effectiveness - Output 2.3.1

The maritime and land transport industries operate in a robust and stable regulatory environment.

 

 

 

Parliamentary review of coastal shipping policy and regulation

The Minister announced on 13 March 2008 that the House of Representatives Standing Committee on Infrastructure, Transport, Regional Development and Local Government would conduct a review of Australia's coastal shipping policy and regulation. The committee is tasked with making recommendations on ways to enhance the competitiveness and sustainability of the Australian coastal shipping sector. The committee's terms of reference include examining skills issues as well as issues of safety, security, defence and environment protection. The committee is due to report in October 2008.

The Department provided evidence to the committee through a submission and a public hearing, and will contribute to the Australian Government's consideration of the committee's findings when determining the future of Australia's coastal shipping policy.

Regulation of ocean-going cargo carriers

International liner shipping used for the carriage of exports or imports can apply for specific exemptions from the Trade Practices Act 1974. This enables shipping lines to work cooperatively to provide higher levels of services for the benefit of Australian exporters and importers. They are required to register such cooperative agreements, termed 'conference agreements', under Part 4 of the Trade Practices Act, including any variations. Peak shippers' bodies are given the opportunity to negotiate with the members of the conference agreement within the statutory process.

Registration of an Australian agent is also required for all ocean-going cargo carriers who provide international liner cargo shipping services. The Minister also has powers in relation to non-conference ocean carriers with substantial market power.

The registers and conference agreement files kept by the Registrar and the Australian Competition and Consumer Commission under Part 4 are available for public inspection.

As noted in the annual report for 2006-07, following a review of Part 4 by the Productivity Commission, the government proposed to make amendments to the Trade Practices Act. In 2007-08 the Department consulted industry stakeholders to inform the drafting of potential amendments.

Regulation of coastal cargo carriers

The Navigation Act 1912 requires all vessels carrying cargo or passengers interstate to be licensed or to have a coastal permit. The volume of applications for licences or permits fluctuates from year to year, reflecting the demand for coastal shipping services.

For many years, the Navigation Act has had an inbuilt preference for licensed vessels to carry coastal cargo and passengers. However, the legislative framework also allows coastal trade permits to be issued to unlicensed vessels when there is no Australian licensed ship available or where the service provided by licensed ships is not adequate to meet the needs of shippers and it is in the public interest to issue a permit. The Department administers the system under ministerial guidelines on the administration of the Navigation Act and associated Regulations.

On 26 June 2008, the Minister announced amendments to the ministerial guidelines to take effect 1 August 2008. Changes in the administration of Part VI of the Navigation Act include:

  • a new consultation process for applications for single-voyage and continuing-voyage permits with all licensed ship operators, the Australian Shipowners Association and maritime unions to assist the Department to establish whether an Australian ship is available;
  • the publication of details of permits issued, including the name of the ship, cargo, dates and ports of loading and discharge; and
  • a requirement for permit holders who load cargoes that breach the terms of a permit to provide a satisfactory explanation if they wish to be considered for further permits.

Implementation of international shipping conventions to protect the environment

The Department was the lead agency for developing legislation to give effect to two international shipping conventions:

  • the International Convention on Civil Liability for Bunker Oil Pollution Damage (Bunkers Convention), which makes ship owners liable for oil spill damage when oil is carried as fuel in a ship's bunker; and
  • the Protocol of 2003 to the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage 1992 (the Supplementary Fund Protocol), which creates a third tier of compensation for damage resulting from spills of oil from an oil tanker, so that the maximum amount increases from approximately $400 million to $1,470 million.

The Bills to give legislative effect to these conventions were introduced into Parliament in the second half of 2007-08 and the Bunkers Convention legislation was passed by both houses during 2007-08. It is expected that the new legislation will come into effect in the second half of 2008-09.

Australian Maritime College

Working with the Australian Maritime College and the University of Tasmania, the Department developed legislation that saw the two institutions become integrated from 1 January 2008. The integration will deliver benefits to both institutions. Under the legislation, the Minister will have a role for the next five years to ensure the objectives of the integration are achieved.

Review of the Disability Standards for Accessible Public Transport

The review of the Disability Standards for Accessible Public Transport, which commenced with the engagement of Allen Consulting Group in April 2007, progressed in 2007-08. Major activities during the year included the operation of an accessible website, receipt of written submissions, conduct of public hearings, release of a draft report for stakeholder comment and collation of responses.

Throughout the review process, valuable insights and experiences were provided by stakeholders, including people with disabilities, disability organisations, industry representatives, transport operators and providers, and state and territory governments.

Review of freight councils

Freight councils operate in each state and collectively form the Australian Freight Councils Network. The councils are jointly funded by the Australian Government and state governments, with support from the logistics industry, to identify and address constraints to the efficient operation of freight supply chains in Australia.

During 2007-08, the Department commissioned an independent review of the activities and funding of Australian freight councils over the three-year funding period to 2007-08. The review found that the councils had been effective in contributing to the development of the logistics industry at the regional and state and territory levels but had been less effective in contributing to national policy development.

On the basis of the report's findings the Australian Government decided to extend freight council funding for one year, pending consultations with state and territory governments on the role of councils beyond 2008-09.

Release of a new national strategy for the logistics industry

The Department supports the Australian Logistics Council (ALC), a partnership between the Australian Government and senior industry leaders, created to lead the development of the freight logistics industry in Australia.

Following the conclusion of the Australian Logistics Industry Strategy in 2006-07, the ALC was funded to develop and implement a new industry strategy. In February 2008, the ALC released the National Strategy for the Transport and Logistics Freight Industry 2008-15 - Enhancing Australia's Supply Chains.

The COAG national reform agenda for transport is actively progressed in conjunction with all Australian governments.

National maritime regulation

The Department engaged closely with the Australian Maritime Safety Authority to progress COAG and Australian Transport Council (ATC) reforms of national maritime regulation, and collaborated with state and Northern Territory officials in preliminary work on options for a single national approach to maritime safety regulation.

Table 4.11 Trends in maritime and land transport

  2004-05 2005-06 2006-07 2007-08
Price of output $10.7m $12.9m $13.3m $16.7m
Maritime regulations and programs administered under this output
Activity regulated under Part 4 of the Trade Practices Act 1974
Shipping conference agreements granted final registration 9 26 9 22
Variations of existing agreements granted final registration 15 26 24 24
Agreements granted final registration within 14 days 100% 100% 97%a 100%
Activity regulated under the Navigation Act 1912
Coastal shipping licences issued 63 62 43 57
Single voyage permits issued 687 742 956 794
Continuing voyage permits issued 166 149 116 158
Permits issued within target time framesb 100% 100% 100% 100%
Oil Pollution Compensation Fund
Entities levied 6 - 5 7
Payments made in respect of fund $2.3m - $0.3m $0.2m
Tasmanian Freight Equalisation Schemec
Shippers assisted 1,300 1,341 1,420 1,430
Claims paid 6,377 6,831 7,046 7,991
Cost of programd $89.3m $92.3m $89.6m $101.3m
Tasmanian Wheat Freight Schemec
Tonnes of wheat shipped 27,433 - 27,714 38,749
Shipments 4 - 4 7
Cost of program $0.6m $0.0m $0.6m $0.9m
Bass Strait Passenger Vehicle Equalisation Scheme
Vehicles shipped 216,986 209,187 190,413 190,261
Cost of program $32.4m $31.1m $28.4m $30.1m
Total cost of Tasmanian schemes $122.3m $123.4m $119.6m $132.3m
Road, rail and intermodal programs administered under this output
National Transport Commission
Payments made $2.5m $2.5m $2.9m $2.9m
Federal Interstate Registration Scheme
Cost of program $46.2m $48.0m $50.7m $54.4m

Note: Targets are not set in areas where activity is driven by demand.

a Applicants occasionally request an extension of the 14-day deadline in order to meet the criteria for registration.
b Includes 47 amended permits. The target timeframe for issuing continuing voyage permits is 10 working days and for single voyage permits four working days, unless an urgent application fee is paid (in which case the target is the next working day).
c Rebates on shipments of containerised wheat were paid under the Tasmanian Wheat Freight Scheme until July 2004, when they became eligible for rebates under the main Tasmanian Freight Equalisation Scheme program.
d The 2007-08 cost includes 2,198 containers (approximately 52,300 tonnes) of wheat at a cost of $1.7 million.

National Transport Strategy Division

A National Transport Policy Framework produced by the National Transport Commission served as a catalyst for the Australian Transport Council (ATC) comprising all Australian transport ministers to agree on 29 February 2008 to develop major aspects of national transport policy. Different work streams are proceeding under the guidance of individual ministers.

Calls for a seamless national transport system have come from both industry and the community and were reflected strongly in outcomes from the 2020 Summit held in Canberra in April 2008.

In May 2008, ministers agreed that the new approach would involve better planning and investment in infrastructure to serve freight supply chains and the movement of people, particularly in major cities, and greater uniformity in national regulatory structures. The ATC has acknowledged the need to achieve environmental outcomes consistent with the climate change agenda and to improve road and rail safety, while supporting transport policy and operations with better research and workforce planning.

To accelerate national reforms that will result in a more consistent approach to the regulation of transport, ministers met again in July 2008 to consider proposals for a single national system for the regulation, registration and licensing of heavy vehicles and drivers; a national road safety council; and a national rail safety regime, including a regulator and a separate investigator. Ministers also agreed to consider further work on implementing a single national approach to maritime regulation.

Key priorities as identified in the 2008-09 PBS include working with other jurisdictions and stakeholders to progress the development of a national transport policy to support the operation of a single national transport market.

For 2008-09, the key challenges will include:

  • developing policy and legislative options to support the development of national transport markets; and
  • facilitating effective consultation with stakeholders.

Minister Albanese at the 29 February 2008 post meeting press conference at Parliament House where the Australian Transport Council had agreed to a national approach to transport policy

Minister Albanese at the 29 February 2008 post meeting press conference at Parliament House where the Australian Transport Council had agreed to a national approach to transport policy (Photo DITRDLG)

Purchaser-provider arrangements - Output 2.3.1

The Department has a purchaser-provider arrangement with Tasmania Assistance Services-Centrelink. A memorandum of understanding (MOU) between Centrelink and the Department was signed on 30 August 2002, and will conclude on 30 June 2009. Centrelink administers, on behalf of the Department, the Bass Strait Passenger Vehicle Equalisation Scheme, the Tasmanian Freight Equalisation Scheme and the Tasmanian Wheat Freight Scheme. Each scheme operates under Ministerial Directions approved by the Minister.

Under the current arrangements, Centrelink reports to the Department against an agreed set of key performance indicators on a monthly basis. Centrelink lies within the Human Services portfolio and, therefore, also reports on its outcomes and output structure, providing a full set financial statements within the Portfolio Budget Statements (PBS) for the Human Services Portfolio. In 2007-08 Centrelink received $0.91 million to administer the Tasmanian schemes, and agreed performance indicators were met.

Administered programs for Output 2.3.1 - Surface transport policy, programs and regulation

Table 4.12 Summary of performance - Australian Maritime College - marine research funding project

Performance indicators Results
Effectiveness

Enhanced maritime research capability through capital investment to upgrade the Australian Maritime College's Cavitation Tunnel and Ship Simulator.

The Australian Maritime College (AMC) is the premier centre for maritime training, education and research in Australia and the Asia-Pacific region. The AMC undertakes world-class training and research on ship system design, utilising its ship simulator and cavitation tunnel. The upgrades ensure that the AMC has the necessary infrastructure to maintain its position as the global leader in maritime research and in the provision of assistance to Australian industry.

Quality

Payments are made against expenditure in line with funding agreement.

Project funding was completed in May 2008, within the timeline stipulated in the funding agreement signed in August 2007.

Location

Launceston, Tasmania.

The upgraded facilities are located at Launceston, Tasmania.

Cost

$3.0 million

The actual cost of this program in 2007-08 was $3.0 million.

Overall performance Fully achieved.

Note: This program was first announced in the 2007-08 PAES.

Table 4.13 Summary of performance - Bass Strait Passenger Vehicle Equalisation Scheme

Performance indicators Results
Effectiveness

The cost of sea travel across Bass Strait is alleviated for passengers accompanying a vehicle.

This scheme lessens the cost of seagoing travel for eligible passengers by reducing the cost disadvantage associated with transporting eligible passenger vehicles across Bass Strait.

The rebate payable for each crossing depends on the vehicle type. In 2007-08 rebates ranged from $21 for a bicycle to $300 for a motor home or a vehicle towing a caravan. Up to $168 was payable for cars.

Quality

Eligible passengers receive a rebate on their fare within 30 working days of submitting a claim.

The rebate was provided as a reduction in the fare charged by service providers to the drivers of eligible passenger vehicles. Drivers who fly across Bass Strait but ship their vehicles may be eligible for a rebate if they:

  • are unable to travel by sea because of a disability; or
  • are travelling between Melbourne and King Island, as the service provider on this route carries vehicles only.

The service provider is reimbursed for the total rebate provided to eligible passengers. In 2007-08 the major recipient continued to be TT-Line, which operates the passenger ferries between Devonport and Melbourne.

Claims are processed by Centrelink's Hobart office under a purchaser-provider arrangement. All claims were paid within six days of receipt from the service operators. On average it took three days to process claims.

Cost

$30.7 million

The scheme is demand-driven. Costs vary with the number and mix of vehicles shipped across Bass Strait. The actual cost of the scheme rose from $28.4 million in 2006-07 to $30.1 million in 2007-08. This was due to an increase in the subsidy for the shipment of standard passenger vehicles, which comprise 85% of all vehicles shipped across Bass Strait. The subsidy increased from $150 to $168 from 30 October 2007.

Overall performance Fully achieved.

 

Did you know

Green Vehicle Guide
The Department manages the Green Vehicle Guide website which rates new light vehicles based on their environmental performance. One way to measure and reduce the impact on the environment is by using the Guide when purchasing a vehicle. Common misconceptions are that all large cars are poor performers and all small cars are good performers.

The Guide can be found at www.greenvehicleguide.gov.au

Table 4.14 Summary of performance - Interstate Road Transport Fees

Performance indicators Results
Effectiveness

The Interstate Road Transport Fees program establishes a registration scheme that provides a viable alternative to state and territory based registration schemes for heavy vehicles.

The Australian Government established the Federal Interstate Registration Scheme (FIRS) in 1987 to promote uniform charges and operating conditions for heavy vehicles operating interstate.

In 2007-08, FIRS registrations totalling 21,800 vehicles represented around 4% of Australia's heavy vehicle fleet.

During the year, the Department worked on proposed amendments to the FIRS legislation aimed at improving its operation as well as implementing nationally endorsed road transport reforms.

Quality

Fees are collected and dispersed to states and territories in an efficient manner that meets audit requirements in line with an agreed formula based on meeting the cost of damage to roads caused by heavy vehicles.

Revenue from FIRS heavy vehicle registration charges collected by the states and territories was submitted to the Australian Government at the end of each month. By jurisdiction, the revenue that was submitted in 2007-08 was:

  • New South Wales - $13.6 million;
  • Victoria - $27.9 million;
  • Queensland - $4.7 million;
  • South Australia - $6.0 million;
  • Western Australia - $1.4 million;
  • Tasmania - $0.04 million;
  • Australian Capital Territory - $0.5 million; and
  • Northern Territory - $0.04 million.

Figure 4.2 shows the proportion of revenue returned to each jurisdiction.

Revenue was redistributed to the states and territories quarterly in line with an agreed formula, which targets payments to maintain roads damaged by FIRS heavy vehicles operations.

Cost

$57.5 million

The actual cost of this program in 2007-08 was $54.4 million.

This is an activity-driven program. Expenses are based on the redistribution of actual fees collected from heavy vehicles and trailers registered under FIRS by state and territory registration authorities.

Overall performance Fully achieved.

Figure 4.2 Distribution of interstate road transport fees in 2007-08

Figure 4.2	Distribution of interstate road transport fees in 2007-08

Table 4.15 Summary of performance - National Transport Commission

Performance indicators Results
Effectiveness

The NTC is able to assist governments to increase transport productivity and sustainability through consistent and effective road and rail regulation.

An independent statutory body, the National Transport Commission (NTC) advises Australian transport ministers on regulatory and operational reforms for road, rail and intermodal transport, with a particular focus on productivity, safety, efficiency and sustainability. The NTC is established under the National Transport Commission Act 2003. The Australian Government contributes 35 per cent of the NTC's annual operating budget.

The NTC is able to assist governments to increase transport productivity and sustainability through consistent and effective road and rail regulation.

The NTC collaborated with all governments, industry bodies, regulators and police forces during the year, to develop practical national solutions and to monitor and maintain their implementation. Among other outputs, it delivered:

  • the COAG-endorsed new heavy vehicle charges determination, for proposed implementation from 1 July 2008, to ensure that heavy vehicles' allocated infrastructure costs are recovered and that cross-subsidisation across heavy vehicle classes is removed;
  • national child restraint laws to provide a safe progression from capsules to seat belts;
  • national rail safety reform, including joint audits of level-crossing safety risks by road and rail-track owners and operators;
  • increased accountability through 'chain of responsibility' laws to target the causes of heavy vehicle speeding; and
  • a draft national transport plan and policy framework; the National Code of Practice for Retrofitting Passenger Restraints to Buses; a draft policy proposal on accreditation to encourage greater participation in audit-based compliance assurance schemes; a training package to support heavy vehicle driver fatigue accreditation; and an in-service standard to manage engine brake noise.

More information about the NTC and its outputs is available on the commission's website www.ntc.gov.au.

Quality

Payments are made in line with the Australian Government's obligations under the National Transport Commission Act 2003.

In 2007-08, the NTC received the full amount payable, in quarterly instalments.

Cost

$2.9 million

The actual cost of this program in 2007-08 was $2.9 million to meet the Australian Government's obligations under the Act. This included a payment of $0.3 million to the NTC in 2007-08 in accordance with the Australian Government's commitment under the MOU between the ATC and the Code Management Company.

Overall performance Fully achieved.

Table 4.16 Summary of performance - Oil Pollution Compensation Fund

Performance indicators Results
Effectiveness

Compensation is available for the costs of an oil spill in the event that these costs exceed the tanker owner's ability to pay.

The owners of oil tankers must take out insurance to cover the cost of any oil spilled from their tankers. However, owners do not have unlimited liability. Their liability depends on the size of their tanker - the bigger the tanker, the larger the liability. The maximum liability for the biggest tanker is approximately $175 million.

Where the costs of compensation resulting from an oil spill exceed the tanker owner's liability or the owner is unable to pay the costs for some other reason, compensation is payable from International Oil Pollution Compensation (IOPC) Funds.

Total compensation of up to approximately $400 million would be payable by the tanker owner and IOPC funds in the event of a major spill. No payment has ever been made by the IOPC funds for an incident in Australian waters, as no spill has ever exceeded the tanker owner's liability/ability to pay.

Quality

All persons (including oil companies) that receive more than 150,000 tonnes of crude or heavy oil by sea make contributions to the International Oil Pollution Compensation Fund.

Levies are collected from all entities that receive more than 150,000 tonnes of crude or heavy fuel oil in a calendar year by sea, based on the expected costs of compensation and overheads of the funds in the coming year.

Seven companies - Alcan Gove Pty Ltd, BHP Billiton Ltd, BP Australia Ltd, Caltex Australia Pty Ltd, Mobil Oil Australia Ltd, Queensland Nickel Pty Ltd and the Shell Company of Australia Ltd - are contributors to the Fund.

Payments are passed on to the Fund in line with Australia's obligations under the International Convention for the Establishment of an International Fund for Compensation for Oil Pollution Damage.

Payments to the IOPC Funds, which relate to the quantities of oil received by the oil companies, were delivered in line with Australia's obligations as a party to the IOPC Fund Convention.

Cost

$0.5 million

In 2007-08, the Department reported payments totalling $0.2 million in relation to the Funds. This comprised:

  • transfers to the IOPC Funds of levies received from oil companies ($107,000); and
  • transfers from the IOPC Funds to oil companies, refunding excess levies paid in previous years ($139,000).

The underspend was due to a low level of major oil pollution incidents.

Overall performance Fully achieved.

Table 4.17 Summary of performance - Payments to the Maritime Industry Finance Company Limited (MIFCo)

Performance indicators Results
Effectiveness

Successful windup of MIFCo and return of excess stevedoring levy to industry.

The Maritime Industry Finance Company Limited (MIFCo), a wholly Australian Government-owned company, was established in 1998 to make redundancy-related payments in support of waterfront reforms. The company:

  • provided funding for 1,487 redundancies, finalising all redundancy claims in 2000-01; and
  • funded its obligations through a government-guaranteed loan of $220 million.

The government approved the early repayment of the MIFCo borrowings, with MIFCo finalising the loan agreement on 17 July 2006. The company was placed into voluntary liquidation in November 2006 and was successfully wound up in January 2008. The company was deregistered in April 2008.

Quality

Payments are made in line with the Australian Government's obligations.

The collection of a levy from industry to cover the cost of MIFCo loan repayments, under the Stevedoring Levy (Collection) Act 1998, ceased in 2005-06. Levy revenue totalling $250.7 million was passed on to MIFCo.

In 2007-08 regulations commenced specifying the process for the return of excess levy, which was completed in April 2008.

Cost

$0.7 million

The actual cost of the program in 2007-08 was $0.7 million, the amount which was returned to industry.

Overall performance Fully achieved.

Table 4.18 Summary of performance - Tasmanian Freight Equalisation Scheme

Performance indicators Results
Effectiveness

Costs are alleviated for businesses shipping containers of goods from Tasmania to the mainland for use or sale, or to Tasmania as an input to a production process.

 

The Tasmanian Freight Equalisation Scheme provides rebates to shippers based on the cost of shipping a standard 20-foot container between northern Tasmania and Victoria, less the cost of sending it the same distance (420 kilometres) by road.

The rebate of up to $855 per container cannot exceed the actual freight bill paid by the shipper.

In total, 7,991 claims were paid and 1,430 shippers were assisted in 2007-08.

The scheme was reviewed by the Productivity Commission during 2006-07. In its response to the inquiry's findings, in June 2007 the Australian Government announced that significant reforms to both the Tasmanian Freight Equalisation Scheme and the Tasmanian Wheat Freight Scheme would be implemented. The government is considering the timing and details of the reforms.

A new intrastate component of the scheme, for eligible shipments between King Island and the main island of Tasmania and between Flinders Island and the main island of Tasmania, will be implemented from 1 July 2008.

Quality

95% of claims from eligible shippers are processed within 30 days.

Claims from shippers are processed by Centrelink's Hobart office under a purchaser-provider arrangement; 100% of claims were processed within 30 days (with over 91% of claims processed in less than 15 days).

Cost

$101.0 million

The scheme is demand driven. An increase in the number of claims saw the cost of the scheme increase from $89.6 million in 2006-07 to $101.3 million in 2007-08. The scheme is expected to cost in the order of $101.7 million in 2008-09.

Overall performance Fully achieved.

Table 4.19 Summary of performance - Tasmanian Wheat Freight Scheme

Performance indicators Results
Effectiveness

Costs are alleviated for businesses shipping bulk wheat to Tasmania.

In 2007-08, the Tasmanian Wheat Freight Scheme provided assistance for eligible shippers collectively moving more than approximately 52,300 tonnes of bulk wheat shipments across Bass Strait. The value of the rebate was capped at $20.65 per tonne in 2007-08.

The scheme was reviewed by the Productivity Commission during 2006-07. In its response to the inquiry's findings, in June 2007 the Australian Government announced that significant reforms to both the Tasmanian Freight Equalisation Scheme and the Tasmanian Wheat Freight Scheme would be implemented. The government is considering the timing and details of the reforms.

Quality

95% of claims from eligible shippers are processed within 30 days.

Claims from shippers are processed by Centrelink's Hobart office under a purchaser-provider arrangement; 100% of claims were processed within 30 days.

Cost

$1.1 million

Demand for the program increased in 2007-08, with bulk wheat shipments continuing into mid-2008. The actual cost of the program in 2007-08 was $0.9 million.

The scheme is demand driven. Expenses are determined by eligible claims being lodged by shippers.

Overall performance Fully achieved.

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