Posted on 20. Feb, 2012 in News

The Tasmanian Government has threatened a constitutional challenge against the Baillieu Government’s new Port of Melbourne tax as industry anger about the charge grows.

Tasmanian Infrastructure Minister David O’Byrne has written to Ports Minister Denis Napthine raising concerns that the tax could cause the loss of more jobs or be considered a constraint against trade between states and therefore contrary to the Australian constitution.

Mr O’Byrne raises concerns that the tax does not appear to be in line with the Essential Services Commission Price Monitoring Determination for Victorian Ports 2010.

Shadow Minister for Ports Tim Pallas said the Tasmanian Government had warned the tax could have a detrimental impact on producers and consumers of about $10 million a year.   “These are all serious issues and the Victorian consumer, business and industry deserve answers from Mr Baillieu and Mr Napthine,” Mr Pallas said.

“The Baillieu Government tax will raise $75 million for State Government coffers with no benefit for the industry, Port of Melbourne or consumers.

“It has failed to produce a plan for road, rail and port infrastructure improvements to be funded from this tax. It is consumers who will bear the brunt of the tax slug with higher prices for whitegoods, cars, tractors, and foods and other products as business will be forced to pass on costs.

“Claims by the Baillieu Government that industry is supporting this tax are just nonsense.”

Shipping Australia’s Ken Fitzpatrick (Australian Financial Review February 10, 2012) said the fee was a “severe imposition” and could be “the nail in the coffin” for the struggling industry, and that “everyone along the supply chain will suffer”.

Shipping Australian chief executive Llew Russell told the Weekly Times (February 15, 2012): “Melbourne is now likely to become the highest-cost port in Australia, which will rank it among the dearest in the world. What is worse with this tax there is no incentive to increase productivity. Farmers will be among the hardest hit.”

Cruise operators Carnival Australia CEO Ann Sherry (Australian Financial Review, February 10, 2012) said: “any further increase in Port charges in Melbourne will necessarily have a cost impact on cruise operators and there is always a risk of deterring them from calling once these costs become commercially unsustainable.”

“The Labor Opposition voted against the tax, and we are calling on the Baillieu Government to release all regulatory and the Business Impact Statement and explain what impact this tax will have on inflation, employment and the Port’s competitiveness,” Mr Pallas said.

“Mr Baillieu should also release all stakeholder submissions to the Port of Melbourne concerning the increased charges (submissions closed on 10 February).”

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