Cutting freight subsidy will harm Tasmania: exporter

One of Tasmania’s biggest exporters has criticised the recommendations made in the Inquiry into Tasmanian Shipping and Freight.

The ABC reports that Paper giant Norske Skog’s general manager Rod Bender gave evidence at the Productivity Commission inquiry and said that companies will not want to do business in the state if subsidies decrease.

As PS News reports, the Commission’s draft report found that there are problems with the design and operation of the Tasmanian Freight Equalisation Scheme (TFES), Bass Strait Passenger Vehicle Equalisation Scheme (BSPVES) and the Tasmanian Wheat Freight Scheme (TWFS).

According to Commissioner Karen Chester, the schemes are outdated and they do not achieve what they are intended to achieve.

Bender challenged the conclusion that exporters are being over compensated by the schemes. He said that rather than being overcompensated by 33 per cent, as the draft report concludes, Norske Skog is actually under-compensated by 27 per cent.

“Businesses like ours will make different strategic decisions about either coming to Tasmania in the first place, or investing here and building on their operations that exist already,” Bender said.

“I think what you’ll find is businesses will largely look to schemes like this, important schemes like this to make sure that they’re making prudent decisions strategically.”