First hearing for the Senate Select Committee on the Tasmanian Freight Equalisation Scheme takes place on King Island
The small island community is pleading with politicians from Canberra to fix the scheme meant to help bring down the cost of valuable freight after the cost of 2L milk surged to $9.
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King Islanders have told a Senate inquiry about how a scheme meant to help financially is hurting them instead.
On Monday, the Senate Select Committee on the Tasmanian Freight Equalisation Scheme (TFES) held its first meeting on King Island.
The inquiry was set up to investigate potential shortcomings of the scheme that freight assistance to eligible businesses who transport certain goods by sea across Bass Strait.
King Island and other locations in the Bass Strait heavily rely on the TFES, which the federal government amended in July to allow charities sending fodder and feed for farmers from the mainland to receive financial assistance with shipping costs.
Senator Tammy Tyrrell is the Chair of the Senate Select Committee on the TFES and was at the King Island hearing on Monday.
“The cost of living is higher on King Island because freight costs are added to everything that comes on to the island or is sent off the island,” Senator Tyrrell said.
“It costs $9 to buy 2L of milk on King Island because, as a perishable item, milk has to come by air.
“Witnesses at the King Island hearing spoke about how they have to pay freight costs upfront and then go through a clunky process for reimbursement, but they can only be reimbursed for some goods, and only for items that travel by sea.
“The TFES is supposed to compensate Tasmanian businesses because they don’t have access to the national road highway and rail networks, and so have to rely on shipping.
“It’s clear from the evidence we heard today that Tasmania’s freight equalisation scheme equalises nothing.”
In his submission on behalf of the council, King Island Mayor Marcus Blackie said the “management of freight is a long-term and significant issue for our community and our economy”.
He also wants all goods shipped to and from the Bass Strait Islands to be eligible for TFES assistance.
“Limiting the classification of goods eligible for TFES assistance further disadvantages the Bass Strait Islands over their mainland counterparts, as it ignores the impossibility of significant manufacture or processing in our island,” Mr Blackie said.
“Simply put, we are reliant on over-sea freight for the vast majority of products needed by our community and economy on a daily basis.”
Meanwhile, King Island Chamber of Commerce and Industry President Heidi Weitjens wanted to see TFES assistance indexed to the consumer price index for the scheme “to maintain its real-term value and effectiveness”.
“While the TFES is vital for maintaining economic viability on King Island, our research shows it has not evolved to keep pace with our community’s changing needs and obstacles,” Ms Weitjens said.
“Rising freight and travel costs have placed significant burdens on market access, business sustainability and resident livelihood.
“Additionally, the challenges of unpredictable weather conditions lead to frequent freight cancellations and delays, disrupting both goods and passenger transport and the on flow issues are too long to list.”
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Originally published as First hearing for the Senate Select Committee on the Tasmanian Freight Equalisation Scheme takes place on King Island
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