Boost to the Tasmanian Freight Equalisation Scheme

The Morrison Government is boosting the Tasmanian Freight Equalisation Scheme (TFES) by modernising its operation and enhancing the benefits for Tasmanian businesses.

Tasmanian businesses play an important role in our economy and our government is committed to ensuring they have a level playing field with their mainland counterparts through the TFES.

Under a proposed extension of the scheme, eligible businesses will receive new funding assistance for eligible goods that are imported to Tasmania via an Australian port, where there is no direct Australian-made equivalent. This extension will follow a review process to ensure that any unforeseen consequences can be addressed in a way that does not adversely affect stakeholders.

The Government is also reviewing the level of assistance provided to Tasmanian businesses faced with the costs of transporting high-density goods to and from the mainland.

These improvements will be subject to a review, which is already underway, and the findings will be delivered to the Government by the end of year.

Geography should not be a barrier to prosperity and the review will consider increasing the rates to ensure the level assistance we provide for freight and high-density goods reflects current freight costs to put Tasmania’s business owners and employers on a level playing field.

The Government will also institute a transparent annual review process that will consider stakeholder submissions and publish the outcomes and underlying assumptions of reviews, with the first review to commence in January 2020. This will ensure the TFES is working as it is intended and no Tasmanian businesses are worse-off.

This is a common-sense approach that will provide greater assistance to Tasmanian businesses, particularly in the state’s growing agriculture and fisheries industries.

The Government will also permanently integrate into the ongoing TFES the 2016 extension, which introduced assistance for Tasmanian goods transhipped at mainland ports.

This will ensure that funding for eligible Tasmanian transhipped goods will be permanent, ongoing, uncapped and demand-driven, consistent with the overall funding approach for the TFES.

Integrating the expansion into the ongoing TFES recognises that the expansion is achieving its goal of allowing Tasmanian manufacturers and primary producers to better compete with their mainland counterparts on equal terms in all markets.

Further, the Government recognises that long TFES payment processing times can adversely impact businesses.

To reduce administrative burden and cut red tape for businesses, the Government will reduce the payment processing times from the date of a correctly submitted claim from 35 to 30 days.

To ensure TFES claims are processed as soon as possible, the Government will impose interest payments, based on the General Interest Charge rate, on late TFES payments so that businesses are not left out of pocket if a payment from Government is not made on time.

The Government acknowledges the advocacy of the Tasmanian Liberal Senate Team, our Liberal Lower House members and Senator Jacqui Lambie, who have consistently advocated for changes to the TFES on behalf of their constituents.

The Government is committed to supporting Tasmanian businesses and is making these changes to ensure they remain competitive and prosperous now and in the future.