Reade Pictu Dire straits on trans­parency

Tasmanian Country - - OPINION - Wayne John­ston

OVER the past 12 months un­til re­cently fuel prices, both at the re­tail and whole­sale level, in­creased sig­nif­i­cantly. All of us have seen pump prices go from $1.30-odd to near $1.70 per litre, but it is not only at the ser­vice sta­tion th­ese hikes hit.

Fuel prices have a direct im­pact on a state such as Tas­ma­nia, which as an is­land re­lies to­tally on freight for the trans­port of goods in and out.

Such costs are in­evitably passed onto con­sumers and small busi­ness, in­clud­ing farm­ers. In some cases they make some busi­nesses un­vi­able.

The TFGA has re­cently be­come aware of a fuel sur­charge be­ing ap­plied to all freight across Bass Strait. In one case this sur­charge stands at 16 per cent, up from 8 per cent.

The prob­lem with ship­ping com­pa­nies ap­ply­ing such sur­charges is a com­plete lack of trans­parency as to how they are cal­cu­lated. For ex­am­ple, what is the bench­mark fig­ure used to jus­tify any sur­charge and why does the cur­rent level of 16 per cent re­main when global fuel prices are in de­cline.

Ship­ping com­pa­nies have the ca­pac­ity to for­ward con­tract their fuel, al­low­ing them to level out volatil­ity. Ar­guably all fuel costs, like all costs, should be a com­po­nent of the freight charge that shouldn’t be based on what you are trans­port­ing, but the vol­ume.

The TFGA has be­come aware there are sig­nif­i­cant is­sues in the way freight charges are cal­cu­lated for prod­ucts into and out of Tas­ma­nia. Bass Strait is recog­nised as one of the most ex­pen­sive freight pas­sages in the world. It has now reached a point where govern­ment needs to pro­vide clar­ity to not only en­sure we have ca­pac­ity across the strait but also that the cost of freight truly rep­re­sents gen­uine costs in­curred by ship­ping com­pa­nies.

Things such as fuel sur­charges only add com­plex­ity to a sit­u­a­tion that is al­ready to com­plex. In that lies the high cost of freight to this state.

This not only af­fects farm­ers, but all Tas­ma­ni­ans.

The TFGA will be rais­ing this with the State Govern­ment to get trans­parency into the sys­tem. Our view is that we should start with the Govern­ment’s own TT-Line.

Eco­nom­i­cally, Tas­ma­nia is mov­ing for­ward but we can­not stand by while freight is­sues con­strain our po­ten­tial.

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