THE issue of Government subsidies to make the King Island shipping and freight task commercially viable has been raised.
Last week the Deputy Premier and Minister for Infrastructure and Transport Michael Ferguson said he will be commissioning an Independent Inquiry by the Economic Regulator into King Island shipping costs.
Greens leader Cassy O’Connor asked Mr Ferguson about the terms of reference for the inquiry and whether King Island resident’s input would be included in the inquiry.
Mr Ferguson said he was currently speaking with the office of the Tasmanian Economic Regulator and the Economic Regulator himself, Mr Joe Dimasi.
“The terms of reference are being considered at the moment that take into account some of those unresolved or unsatisfied concerns.
“I don’t yet have a reporting time frame; however, I am broadly advised to expect that this volume of work would need at least six months to conduct.
“I am hopeful that a response and a report, once the terms of reference are finalised and once Mr Dimasi has been given that instruction by me, by the middle of next year.”
Ms O’Connor asked if the inquiry would include more than just the cost of the service as an issue.
Mr Ferguson said he did not think that the Economic Regulator would look specifically into issues such as delays and other matters.
“The Economic Regulator would be looking at the economic elements and the pricing components that go into prices charged to customers.
“The role that the Economic Regulator will take will be much as the ACCC would do in the private sector and look at business practices and the level of charging as it affects consumers,” he said.
TasPorts chair Stephen Bradbury was asked by Ms O’Connor how TasPorts might run the King Island shipping service on a commercial basis and make it affordable to customers as well.
She proposed that subsidies may be required to make it a viable service from a commercial point of view.
Mr Bradbury said the decision on which direction Bass Island Line operates was a matter for the cargo owners.
“In the weekly service we operated up until February this year to Melbourne, we saw continuing cargo reductions in volume.
The owner of Eastern Line Shipping Warren Dick said he would consider taking over the whole King Island freight task if it were to become available.
Ms O’Connor asked if a subsidy to support King Island residents and producers was something the Government would consider.
Mr Ferguson pointed to the existing Tasmanian Government support.
“The State of Tasmania is carrying that service,” he said. Referring to growth, Mr Bradbury explained the positive support that the company was receiving from JBS and potentially from G6M.
Ms O’Connor asked about the arrangement TasPorts/BIL has with JBS in relation to King Island.
“We are the supplier of shipping services between Grassy and West Devonport,” Mr Bradbury said.
“I would like Prime Minister Anthony Albanese to reconsider the freight equalisation scheme for cargo that is bound for Victoria.
“It is not justified, but those exporters are critical for King Island ‘s economy.”
In March 2022 Senator for Tasmania Jacqui Lambie called on the previous Federal Government to review the Tasmanian Freight Equalisation Scheme and in August, Independent Member for Clark, Andrew Wilkie said he had “long campaigned” for an effective subsidy under the scheme and called for a federal review.
There is currently no direct link to the Port of Melbourne to and from King Island.
Eastern Line Shipping links King Island to Port Welshpool in Victoria and can provide road onwards transport.
Mr Dick has said that he would look at the Port of Melbourne if the demand was there and is also considering other Victorian port options.