The Tasmanian government has proposed merging the two government-owned businesses responsible for the bungled rollout of new Spirit of Tasmania vessels.
Premier Jeremy Rockliff today announced the proposal that would see Spirit operator TT-Line merge with ports operator TasPorts, as well as TasRail, to create an “integrated transport and logistics business”.
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TT-Line and TasPorts had appeared at loggerheads during 2023 and early 2024 over access to the port of Devonport to complete berth upgrades to accommodate the new, larger Spirit vessels.
Now, in a media release titled “better together”, Mr Rockliff said he would like to see them merged.
He said the situation with Spirits showed reform was necessary.
Premier Jeremy Rockliff says he is “still angry” about the problems with the rollout of new Spirit of Tasmania vessels. (ABC News: Jordan Young)
“We are we are proposing the most significant reforms for generations when it comes to our government business enterprises,” Mr Rockliff said.
“One focused entity to ensure that we have a streamlined transport and logistics system in Tasmania, and to ensure that what happened with the Spirits will never happen again.”
A combination of departmental staff and external consultants will assess whether the merger would provide improved efficiency and better customer service, and if there are any legal and competition issues.
Mr Rockliff confirmed the merged entity would not be privatised, nor would another one of the government’s major businesses, Hydro Tasmania.
The berth delays mean the first of the new Spirit vessels will be stored in Edinburgh. (Supplied: Spirit of Tasmania)
The proposed merger would be the second phase of reforms, with the first phase to involve changes to the governance of the state’s 13 government-owned businesses.
The reforms are expected to be legislated next year.
More details released on government business shake-up
The government also released a document that detailed some of the other proposed governance reforms for government businesses.
It notes that “recent events” have highlighted the importance of government businesses to the economy, and that “poor performance … can have devastating impacts”.
The premier says Hydro Tasmania will not be privatised. (Aardvark Adventures)
The proposed reforms include limiting board terms, setting a target for boards to be at least 50 per cent Tasmanian, and introducing board performance reviews and project assurance processes.
It also suggests allowing shareholder ministers to intervene in instances of poor performance, and for a ministerial representative to be on boards if performance is “unsatisfactory”.
Michael Ferguson resigned from cabinet over the Spirits saga. Ministers could be given more power to intervene in the future. (ABC News)
Michael Ferguson — who was the shareholder minister for both TT-Line and TasPorts, and ultimately resigned from cabinet — faced criticism for not intervening thoroughly when problems emerged with the Spirit rollout.
The changes would require the support of parliament.
Mr Rockliff said he was confident that Labor, the Greens and crossbench would support many of the proposals.
“What I am interested in is reaching across all parliamentarians, to the leader of the Labor Party, the leader of the Greens and the crossbench today, outlining the proposal and my willingness to work with them,” he said.
The reform document also notes the government will “assess whether public ownership of each business remains appropriate”.
The government has already announced that parts of the Public Trustee will be privatised.
Businesses support reforms, opposition concerned at merger
The business and farming sector broadly welcomed the governance reforms. However, Labor and at least one independent have questioned the need for the merger.
The government has faced calls from a range of industries to reform government businesses for years — and they have been urged to act quickly.
Michael Bailey, CEO of the TCCI, has been strongly critical of the Spirit of Tasmania failures. (ABC News: Mitchell Woolnough)
Tasmanian Chamber of Commerce and Industry (TCCI) chief executive officer Michael Bailey said the government had to “learn from its mistakes” and it supported looking into a merger.
“While this doesn’t make up for the TT-Line fiasco, it will go a long way to ensuring it doesn’t happen again,” he said.
The TCCI also saw the reforms as an opportunity to further support the development of wind energy — including offshore — in the north of the state.
TasFarmers had also been advocating for reform “for some time” and saying government businesses needed a broader focus than just generating profit.
Independent David O’Byrne has questioned the merger idea. The government could struggle to get it through parliament. (ABC News: Luke Bowden)
Franklin independent MP David O’Byrne was among the MPs to raise governance concerns.
He said he supported pushing ahead with governance reforms but was unconvinced about the merger.
“I’m not convinced a three-way merger between TasPorts, TT-Line and TasRail is the right way to go but there may be a case for an amalgamation of aspects of their operations and I’m open to a conversation around this,” Mr O’Byrne said.
Tasmanian Labor was also sceptical of the merger.
“The remaining components of today’s announcement range from dubious, risky to terrible ideas,” Labor leader Dean Winter said.
“There are serious risks with a merger of GBEs for the tourism and transport sectors in particular.”
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