Funding for Bass Strait Schemes at the Highest Level Ever

The Australian Government is budgeted to spend $131.5 million in 2005-06 on rebates for shipping passenger vehicles and freight across Bass Strait - the highest level ever.

The Parliamentary Secretary to the Minister for Transport and Regional Services, John Cobb, made the announcement today.

"The Australian Government recognises that Tasmanians are at a disadvantage as a result of the transport costs associated with moving people and freight across Bass Strait," Mr Cobb said.

"Our subsidy schemes will continue to build tourism and trade opportunities between Tasmania and the mainland. They make a major difference to the ability of Tasmanian companies to compete with their mainland counterparts on an equal footing.

Bass Strait Passenger Vehicle Equalisation Scheme (BSPVES)

The Government is budgeted to spend $41 million in 2005-06 on the Bass Strait Passenger Vehicle Equalisation Scheme. The Government estimates that it will spend $37.8 million on the scheme in 2004-05 and that 215,000 eligible vehicles will travel by ferry across Bass Strait, including 26,000 on the Spirit of Tasmania III service from Sydney.

The scheme provides a rebate of up to $150 each way for ferry passengers travelling to or from Tasmania with passenger vehicles. The rebate is paid directly to ferry operators and deducted from the fare paid by passengers.

"The Government will continue to maintain the uncapped funding arrangements for the existing services between Victoria and Tasmania, because we recognise that the Bass Strait ferry service is Tasmania's four-lane highway to the mainland," Mr Cobb said.

"We will retain the $8 million funding cap on rebates for the Sydney-Tasmania service. The cap is equivalent to the Spirit of Tasmania III operating at maximum capacity throughout the peak periods of the year and is not expected to be reached in 2005-06."

Tasmanian Freight Equalisation Scheme (TFES)

The Government expects to spend $89.4 million in 2005-06 on the Tasmanian Freight Equalisation Scheme (TFES), which provides targeted funding assistance for freight shipped across the Bass Strait. The scheme will remain uncapped.

"The scheme is an important boost to the Tasmanian economy, because it helps Tasmanian firms compete in mainland markets by reducing their freight cost disadvantage. Every year, the scheme assists Tasmanian firms with the cost of freighting more than 300,000 tonnes of frozen vegetables, 140,000 tonnes of paper, 500 tonnes of confectionery and many other products," Mr Cobb said.

"It also covers the southbound shipment of Australian-made raw materials and equipment used by Tasmania's mining, manufacturing, and primary industries."

Tasmanian Wheat Freight Scheme

The Government has budgeted a maximum of $1.1 million in 2005-06 for the Tasmanian Wheat Freight Scheme, which provides a rebate for bulk wheat shipments across Bass Strait. Wheat shipped in containers is subsidised under TFES.

Mr Cobb said the Government would consider the operation of the two freight schemes further in 2005-06.