Vital scheme lauded

By Brett Charlton

I recently accepted a plaque for Tasmanian Industry for the 40th Anniversary of the Tasmanian Freight Equalisation Scheme (TFES) from the Federal Government.

I was expecting a ruby encrusted brass plaque with a sculpture but I guess something of that magnitude is being saved for the 50th anniversary!

It was a moment that allowed for some reflection of the last 40 years, but for me it was more so an opportunity to contemplate the importance of the scheme to Tasmania and how it will fit into the future growth for our State.

There has been some question as to the success of the extension of the scheme into the export space.

The TFES was extended in January, 2016, to provide some relief to Tasmanian exporters that need to transship their cargoes over a mainland Australian port. The scheme acknowledges that the cost of traversing Bass Strait to access international departure points is a burden on export growth and that there are a lack of direct international shipping services that call in Tasmania.

As such, exporters can access assistance to this burden to the tune of A$700.00 per TEU. Equate this to a cost on average of around A$1030.00 per TEU.

Whilst we would all love an equal platform for trade to our mainland cousins, we do need to acknowledge that we live on an island and there is a cost for equipment to be positioned here (even when direct international vessels called Tasmania there was usually a cost of around A$250.00 per TEU additional to the Melbourne base freight cost).

I think that the benefits of the extension of the TFES for the export traders may prove to be a little difficult to measure in the traditional sense. It has been reported that for the first nine months, the claim amount has fallen short some 30 million dollars of expectation.

Judging the scheme only on the basis of returns in the first year is not the right thought process. One should discuss with the exporters and businesses themselves how the extension to the scheme has assisted them.

I know of a number of examples of exports being competitive and exported because of the scheme – these volumes can be measured by returns lodged.

However, what is not captured at the moment is how the additional revenue is allowing companies to explore new markets, improve marketing, buy upgraded plant and equipment, plan for value adding and most importantly, employment of more Tasmanians.

The TFES is a significant driver for future growth opportunities for the Tasmanian trading community – let’s not get ourselves distracted by statistical data that does not capture all the benefits.

I recently accepted a plaque for Tasmanian Industry for the 40th Anniversary of the Tasmanian Freight Equalisation Scheme (TFES) from the Federal Government.

I was expecting a ruby encrusted brass plaque with a sculpture but I guess something of that magnitude is being saved for the 50th anniversary!

It was a moment that allowed for some reflection of the last 40 years, but for me it was more so an opportunity to contemplate the importance of the scheme to Tasmania and how it will fit into the future growth for our State.

There has been some question as to the success of the extension of the scheme into the export space.

The TFES was extended in January, 2016, to provide some relief to Tasmanian exporters that need to transship their cargoes over a mainland Australian port. The scheme acknowledges that the cost of traversing Bass Strait to access international departure points is a burden on export growth and that there are a lack of direct international shipping services that call in Tasmania.

As such, exporters can access assistance to this burden to the tune of A$700.00 per TEU. Equate this to a cost on average of around A$1030.00 per TEU.

Whilst we would all love an equal platform for trade to our mainland cousins, we do need to acknowledge that we live on an island and there is a cost for equipment to be positioned here (even when direct international vessels called Tasmania there was usually a cost of around A$250.00 per TEU additional to the Melbourne base freight cost).

I think that the benefits of the extension of the TFES for the export traders may prove to be a little difficult to measure in the traditional sense. It has been reported that for the first nine months, the claim amount has fallen short some 30 million dollars of expectation.

Judging the scheme only on the basis of returns in the first year is not the right thought process. One should discuss with the exporters and businesses themselves how the extension to the scheme has assisted them.

I know of a number of examples of exports being competitive and exported because of the scheme – these volumes can be measured by returns lodged.

However, what is not captured at the moment is how the additional revenue is allowing companies to explore new markets, improve marketing, buy upgraded plant and equipment, plan for value adding and most importantly, employment of more Tasmanians.

The TFES is a significant driver for future growth opportunities for the Tasmanian trading community – let’s not get ourselves distracted by statistical data that does not capture all the benefits.