As the CEO of the Victorian Transport Association (VTA), I have witnessed firsthand the transformative impact that targeted government investment can have on our freight systems.
Two initiatives stand out for their effectiveness and necessity: the Mode Shift Incentive Scheme (MSIS) and the Tasmanian Freight Equalisation Scheme (TFES). Both programs play crucial roles in enhancing the efficiency, safety, and sustainability of freight transport across our regions, and it is imperative that we continue to maintain and invest in them.
Since its inception in 2012-13, the Victorian Government has allocated over $51 million to the MSIS. This program has been instrumental in making regional intermodal freight more cost-effective for exporters, particularly in the agricultural sector.
The MSIS facilitates the efficient export of vital produce such as meat, dairy, grain, fruit, and wine. With terminals located in key regional areas like Dooen, Mildura, Tocumwal, and Warrnambool, the MSIS not only boosts local economies but also enhances Victoria’s standing as a major exporter.
The benefits of this scheme extend beyond just economic growth. Each intermodal freight train can carry goods valued at approximately $2.25 million, with benefits for road freight operators as well in the form of less congestion and improved road safety, lower greenhouse gas emissions, which aligns with our collective goal of sustainable transport solutions.
In the 2022/23 budget, a commendable $181 million was set aside for regional rail maintenance and an additional $3.5 million to extend the MSIS.
However, as we look toward the future, the need for sustained investment in these programs cannot be overstated. The transport sector is evolving rapidly, facing challenges such as increasing freight demand, regulatory changes, and the urgent need to reduce emissions. Without ongoing support, we risk stalling the progress we’ve made and jeopardising the efficiency of our supply chains.
Similarly, the Tasmanian Freight Equalisation Scheme (TFES) is a vital initiative that deserves continued backing. Established to alleviate the freight cost burdens faced by Tasmanian businesses due to their geographic isolation, the TFES offsets the cost disparity between sea and road transport across the Bass Strait.
This ensures that Tasmanian businesses can compete on a level playing field with their mainland counterparts.
The TFES provides essential support for a variety of shipments, including outward shipments of Tasmanian-produced goods, inward shipments of materials for local production, and interstate transshipments that may even reach international markets.
By mitigating the high costs of transportation for Tasmanian businesses, the TFES fosters local industries and supports job creation.
The geographic challenges faced by Tasmania should not be a barrier to economic participation. As we move forward, it is crucial to ensure that businesses in Tasmania can continue to thrive and contribute to the national economy without being disadvantaged by their location. Continued investment in the TFES will not only bolster Tasmania’s economy but also enhance the resilience of our national supply chain.
Both the MSIS and TFES represent strategic investments that yield significant returns in terms of economic growth, job creation, and environmental sustainability. As we advocate for these programs, it is essential that stakeholders from all sectors come together to demonstrate their importance to our local and national economies.
I urge policymakers to prioritise maintenance and investment in the Mode Shift Incentive Scheme and the Tasmanian Freight Equalisation Scheme. These initiatives are not merely budget line items; they are the backbone of our transport system, enabling businesses to operate efficiently while contributing to a more sustainable future.
Let us work together to ensure that our freight systems continue to evolve and thrive for generations to come.
Peter Anderson is the CEO of the Victorian Transport Association.
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