Tasmanian Labor Proposes Restructuring of Government Businesses Amid Spirit of Tasmania Vessel Replacement Saga
Tasmanian Labor has proposed restructuring the government businesses involved with the bungled Spirit of Tasmania vessel replacement program, bringing one under more direct government control.
In his state budget reply speech, Labor Leader Josh Willie proposed 'structural reform to clean up the Spirits mess', and 'end the TT-Line bailout cycle'. Last week's state budget contained a $506 million equity injection over four years for state-owned ferry operator TT-Line, to help it deal with the financial fallout of the vessel replacement program. It followed a $75 million equity injection in last year's budget.
The botched project has seen the ships, which were complete years before the necessary berthing facilities, delayed from entering service by years. It has also run $717 million more than expected, mostly due to cost blowouts on berthing facilities. Mr Willie said TasPorts would 'cease to exist as a government business enterprise' under a Labor government, and instead be reclassified as a 'dedicated transport infrastructure entity'. That yet-to-be-named entity would then take ownership of TT-Line's vessels, berthing facilities, gantries and terminals, as well as its estimated debt of $1 billion. Under the plan, a debt-free TT-line would then lease the ships back.
He said this would end the need for further bailouts, while still retaining 'full ownership and operational control'. 'This is about fixing the structure and reducing risk.'
The Labor leader argued this would also allow the state to better argue for a 'Commonwealth Sea Highway Funding Agreement' to help equalise transport costs. He argued the commonwealth should be funding infrastructure like vessels, berths and terminals.
Premier Jeremy Rockliff said Labor's plan would reduce TT-Line 'to a shell'.
TT-Line in 'challenging' financial waters
The two new Spirit of Tasmania ferries are now completed and are in Victorian waters. They are set to enter service in October, when the new berthing infrastructure and gantries will be completed.
The troubled Spirit of Tasmania vessel replacement program made international headlines. Former deputy premier, and minister for infrastructure and transport, Michael Ferguson was relegated to the backbench over the saga. Meanwhile, leadership from both companies have departed their roles.
The government's oversight of its businesses was put in the spotlight following the saga, with the government promising reforms to strengthen their governance and transparency. Last year, the state's auditor-general Martin Thompson formed the view that the government-owned company had become insolvent in July. The company and government have rejected that, calling Mr Thompson's assessment an 'opinion' — while admitting its financial position has been 'challenging'.
Reply focuses on budget cuts
Mr Willie also used his speech to rail against the 'operational efficiencies' in the state budget, calling them 'budget language for cuts'. 'This is a conservative government, led by Australia's arch-conservative treasurer, handing down a slash and burn budget.'
The budget reply contained no new taxes or revenue-raising measures. Mr Willie said the health system was already under 'enormous pressure' and that Tasmanians would 'feel these cuts'.
'Tasmanians just want to know these simple answers: What jobs are being cut? Which services? Which hospitals? Which schools? Which child safety supports? Which community programs?' he asked.
'Patients are waiting too long, ambulances are coming too slowly, nurses are exhausted, hospitals are buckling under demand, and now this government is cutting more than $700 million from health.'
In question time this morning, Health Minister Bridget Archer faced stiff questioning on the 'operational efficiencies'.
