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Record Spending On Bass Strait Transport Schemes

Australian Coat of Arms


The Hon De-Anne Kelly MP
Parliamentary Secretary to the
Deputy Prime Minister, Leader of The Nationals
Minister for Transport and Regional Services

TRS20/Budget 11 May 2004

The Australian Government will spend a record $127.1 million in 2004-05 on rebates for shipping passenger vehicles and freight across Bass Strait, the Parliamentary Secretary to the Deputy Prime Minister and Minister for Transport and Regional Services, Mrs De-Anne Kelly, said today.

"The Government recognises that Tasmanian residents and companies, including tourism operators, are disadvantaged due to the transport costs associated with Bass Strait," Mrs Kelly said.

"Our subsidy schemes have massively increased the number of tourists who bring their vehicles to Tasmania and make a major difference to the ability of Tasmanian firms to compete in mainland markets.

Bass Straight Passenger Vehicle Equalisation Scheme (BSPVES)

"The Government expects to spend $43.2 million in 2004-05 on the Bass Strait Passenger Vehicle Equalisation Scheme, compared to an estimated $39.0 million in 2003-04. The 10.8 percent increase reflects the continuing success of the scheme.

"In 2003-04, the number of eligible vehicles travelling by ferry across Bass Strait is projected to be around 260,000, more than triple the figure before we introduced the scheme in 1996. The figure will be even higher in 2004-05 due to the increased capacity of the two TT-Line ferry services operating between Melbourne and Devonport, and the Spirit of Tasmania III service from Sydney," she said.

The scheme provides a rebate of up to $150 each way for ferry passengers travelling to or from Tasmania with passenger vehicles. The rebate varies for other accompanied vehicles: up to $300 for motorhomes and cars with caravans, up to $75 for motorbikes, and $21 for bicycles. The rebate is paid directly to ferry operators and deducted from the total fare paid by passengers.

"The Government will maintain the current uncapped funding arrangements for the existing services between Victoria and Tasmania, which effectively turn the Bass Strait ferries into an extension of the Hume and Bass Highways," Mrs Kelly said.

"We believe that the main focus of the scheme must continue to be the Bass Strait ferries, so we have decided that it is necessary to cap the total rebates payable for the Sydney to Devonport service.

"The cap will be $8.0 million per year, which is equivalent to the Spirit of Tasmania III operating at maximum capacity throughout the peak periods of the year and at between 70 and 80 percent capacity at other times.

"The cap is significantly higher than the number of vehicles carried on the ship at present. The necessary administrative arrangements will be developed in conjunction with TT-Line and announced shortly.

"The Government has also decided that the scheme will not be extended to cover any more routes, for the same reason," Mrs Kelly said.

Tasmanian Freight Equalisation Scheme (TFES)

The Government expects to spend $83.9 million in 2004-05 on the Tasmanian Freight Equalisation Scheme (TFES), which provides targeted freight assistance to about 1,350 shippers for products as diverse as newsprint, vegetables, and manufacturing and mining equipment. The scheme is demand driven and uncapped.

"I am announcing today that the Government has decided to extend TFES to cover containerised wheat shipments," Mrs Kelly said.

"Bulk wheat shipments are currently subsidised under a scheme administered by the Agriculture, Fisheries and Forestry portfolio, the Tasmanian Wheat Freight Scheme. The Government has decided to wind up this scheme and to extend TFES to replace it.

"The level of Government freight assistance will increase from about $22 per tonne of wheat to an average of $34 per tonne. It is an increase of more than 57 percent; however, freight assistance will only be provided for containerised wheat, not bulk shipments.

"The TFES budget for 2004-05 includes an additional $2.0 million to cover the extra cost of including containerised wheat in TFES. It is an $800,000 increase over the $1.2 million in assistance that we provided under the expiring scheme in 2003-04.

"We have increased the level of assistance so it matches the real disadvantage suffered by Tasmanian industries as a result of the extra cost of shipping containerised wheat across Bass Strait. The scheme does not cover bulk shipments of any commodity; it will not cover bulk wheat shipments.

"Centrelink will contact every user of TWFS in the next few weeks and provide them with detailed information about the new assistance arrangements. The changeover will occur on 1 July 2004," she said.

Media contacts:

Matthew Magin (Mrs Kelly's Office) 0408 478 654