Tasmanian Freight Subsidy Arrangements

The Productivity Commission's inquiry report into 'Tasmanian Freight Subsidy Arrangements' was tabled in Parliament in May 2007. The Commission was asked to report on arrangements for subsidising containerised and bulk shipping between the mainland and Tasmania and to recommend an appropriate future approach and/or arrangements. The Commission found that the current arrangements do not operate as intended. Different ways of claiming rebates for the same freight task can result in different TFES (Tasmanian Freight Equalisation Scheme) payments. This can lead to overestimated freight costs and result in higher than appropriate rebates. The Commission recommended that rebates be based on original invoices from carriers that include a specific wharf-towharf charge. The Commission also recommended that wheat no longer be eligible for assistance under the TFES. The TWFS (the freight equalisation scheme for wheat) would pay the same level of assistance per tonne to wheat shipped in containers and in bulk, with assistance based on the disadvantage of the least cost method of shipping (plus intermodal costs, less a rail freight equivalent cost)