Below is my submission to the Office of the Economic Regulator, relating to the current inquiry into Bass Island Line's pricing policies:

As the elected Member of the Legislative Council representing King Island, I have advocated for many years on behalf of King Islanders for more equitable freight costs and pricing and for greater transparency around freight costs and related details. I have heard many accounts of unexplained price increases and inexplicable freight cost differences with other regional areas for similar and like freight. It has been almost impossible to obtain any explanations related to these matters as the “commercial-in-confidence” claim is the standard response. I would expect the Regulator would not be subject to such barriers in undertaking this important review.

I appreciate and welcome the Government initiated review, following numerous requests from myself and others, into Bass Island Line's (BIL’s) pricing policies. I have had many representations made to me on this matter as all King Islanders are impacted by freight costs and pricing arrangements. I have urged residents to make submissions to the Office of the Economic Regulator (OTTER). I note there are a number of King Islanders who may be unable to do this in written form for a variety of reasons and request provision is made to enable verbal submissions, the inclusion of documentary evidence as well as written submissions that residents may wish to provide to support their verbal or written submissions, to be accepted by OTTER during this process.

I note the OTTER website has been updated with the terms of the inquiry.

The Regulator's inquiry is to assess whether:
1. the prices charged by Bass Island Line for the supply of freight services to customers on King Island on a regular weekly basis reflect:
(a) the efficient costs of providing those services (including charges TasPorts imposes on Bass Island Line);
(b) are consistent with recovering those costs on a full cost attribution basis in line with competitive neutrality principles;

2. where possible, the costs incurred and prices charged per unit are consistent with that observed in other comparable markets;

3. Bass Island Line's pricing behaviour is in line with relevant industry rules and practices;

4. Bass Island Line's pricing behaviour impacts on other competitors and upstream and downstream supply chain participants; and

5. any other matters that impact on prices that the Regulator considers relevant.
Where discrepancies or issues are identified with respect to terms 1 to 5 inclusive, the Regulator is to provide recommendations on how Bass Island Line's pricing policies could be improved.

The Regulator is to deliver a report on the findings of the prescribed body inquiry to the Treasurer by 31 August 2023.
Interested parties can contact the Office of the Tasmanian Economic Regulator to provide input into the inquiry.

As I noted above, I welcome this inquiry however the terms could be difficult to interpret as to scope and detail sought, especially for those with limited literacy skills.

I further note that the report will be provided to Government by August, it is not clear if there is a closing date for submissions. I ask that clear indication of when submissions need to be provided to ensure King Islanders are aware of the timelines to enable their timely participation and consideration of any submissions. I request the website be updated with this information.

As I believe the option of providing verbal submissions is necessary, as well as written, I request OTTER staff undertaking the Inquiry also visit King Island to gain a full understanding of the freight related issues and to speak directly to residents and business owners.

Many King Islanders have significant experience and/or evidence related to freight costs, price increases, freight cost comparisons and matters related to these issues, and many are extremely busy working two or more jobs on the Island making time to write a full submission a challenge, hence the request to provide options for verbal evidence.

Based on information provided to me, I urge the inquiry to consider evidence and information related to, but not limited to, cost comparisons for similar items shipped to and from the island on Bass Island Line (BIL) and/or Eastern Shipping Lines (ESL) would be appropriate.

I assume much of the work to determine pricing structures and freight costs ‘in other comparable markets’ would be a matter fully researched by OTTER although some King Islanders may have access to relevant information related to this term of reference.

Matters that do not seem to be directly covered in the terms of the inquiry and I believe need to be considered include:

1. a full breakdown of cost components, including fuel supply, road and sea transport, storage and distribution and retail costs for fuel in particular;
2. a full understanding of the freight task is crucial and must be clearly described and understood by OTTER as part of this process;
3. the regularity, reliability and timeliness of the BIL service is also important to fully assess and understand to understand freight decisions of King Islanders who rely on timely delivery of freight;
4. transhipping costs with the introduction of a Devonport – King Island return service must also be considered for freight originating in Victoria (this is not implicitly considered in the terms of the Inquiry) and a comparison of previous costs with current freight costs associated with the transhipping costs of freight originating in Victoria, including return costs where applicable for, a light TEU, a heavy TEU, a cattle trailer, fertiliser; and an ISO tank container should be considered;
5. a full assessment of BIL’s financial performance and any financial or other support from TasPorts, as the parent company should also be full considered to fully assess competitive neutrality as per terms of reference 1(b) and 4.

I request a direct and in person presence on King Island by those undertaking the review to enable a full assessment of all aspects of the matters related to Bass Island Line's (BIL’s) pricing policies.

Hon Ruth Forrest MLC
Independent Member for Murchison
20 January 2023

For more information about this inquiry please visit the OTTER website on the link below:

https://www.economicregulator.tas.gov.au/other-industries/prescribed-body-inquiries

Submission guidelines can be found here:

https://www.economicregulator.tas.gov.au/about-us/consultations/submission-guidelines