Independent review into the Tasmanian Freight Equalisation Scheme announced

The federal government has announced an independent review into the Tasmanian Freight Equalisation Scheme (TFES) after a Senate Select Committee inquiry last year highlighted the program’s shortcomings.

The scheme provides financial assistance to Tasmanian farmers and businesses transporting goods across the Bass Strait.

In July, the government increased assistance rates by 25 per cent for domestic goods, resulting in financial aid of up to $1,070 per TEU (Twenty-Foot Equivalent Unit, a standard-sized shipping container).

For goods being shipped from Tasmania to the world and transferred from one ship to another at mainland ports during the process, the flat rate of assistance increased to $875 per TEU.

The same rate applies to international goods being imported to Tasmania via a mainland port.

The Albanese government promised the review during the federal election earlier this year.

“The review will consider if TFES could better support local businesses, including farmers and producers, to compete in domestic and other markets,” a federal government spokesperson said.

“It will also consider how the Bass Strait Passenger Vehicle Equalisation Scheme is reducing the cost of moving passenger vehicles across the Bass Strait.”

The independent review will be conducted by Dr David Parmeter and Dr Jenny Gordon and is expected to be completed in the first half of next year.

Agricultural Minister Julie Collins said the review would provide benefits to Tasmania’s primary industries.

“Tasmanian farmers and producers rightly deserve a level playing field, which is why the Albanese Labor Government has acted,” Ms Collins said.

“The commencement of this review delivers on the commitment we made before the election to Tasmania’s farmers and producers.

“Together with the $95 million we are investing to boost TFES, this review will help ensure a bright future for Tasmanian farmers and producers.”

Lyons MP Rebecca White said the use of the Bass Strait for freight was vital for Tasmania’s economy.

"This review is about making sure Tasmania's freight and passenger transport schemes are fit for purpose and delivering the best outcomes for our state. 

"We know how important affordable and reliable transport is for Tasmanian families and businesses.

“I encourage Tasmanian businesses to participate in the review to make sure that the recommendations to government help us strengthen TFES."

Braddon MP Anne Urquhart was the deputy chair of the committee that conducted the inquiry into the TFES while she was a senator.

“TFES is extremely important for the sustainability and continued operations of Tasmanian businesses,” Ms Urquhart said.

“Being an island state with offshore islands who are entirely dependent on shipping, it’s important to have a robust fit for purpose scheme.”