The Hodgman Liberal Government is committed to reinvesting in essential services that will help the State grow, and create jobs.
TT-Line’s Spirit of Tasmania I and II are an important part of Tasmania’s future tourism and freight needs, but they will not last forever.
Therefore, we are pleased to announce the Government is preparing for their replacement in the early-to-mid 2020s through the creation of a dedicated Vessel Replacement Fund.
The Vessel Replacement Fund will be backed by an initial cash injection of $40 million representing a special dividend from TT-Line in 2016-17 and a second expected $40m dividend in 2017-18. The Fund will be protected by specific legislation to ensure it can only be used for the Spirit replacements.
The legislation will require that the fund remains fully cash-backed.
Establishing a specific fund which is locked by legislation will prevent future Governments from taking the money TT-Line has built up for vessel replacement, and instead using it for other purposes - such as what happened with the Superannuation Provision Account.
Further contributions are expected to be made to the Fund in future years as the budget situation and TT-Line’s cash position allows, noting that even after the initial contribution of $80m to the Ship Replacement Fund, TT-Line will still have significant cash reserves.
We came to office promising to increase passenger numbers and the profitability of the Spirits, and the success of our policy to invest in the refurbishment of the vessels, increase day sailings and reduce fare prices has allowed the Spirits to generate money that will be used to fund their own replacements.
While this year’s results are still to be finalised, the Spirits are on track to beat last year with 377,000 passengers carried as at the end of April 2017. That’s nearly 10 per cent more (33,000 extra passengers) than at the same date last year alone and already well ahead of the full year results achieved under the last year of Labor.
Another element of the Government’s proactive strategy to replace the Spirits is Cabinet’s special Ship Replacement Sub-committee, chaired by the Minister for Infrastructure and comprising the Premier and the Treasurer. Given the role of these vessels for Tasmania, the Government wants to have direct oversight and work with the TT-Line to ensure the next vessels are the right ones.
The Hodgman Liberal Government has put the state back on track, and we are now reinvesting in essential services that will secure Tasmania’s future.