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<\/p>\nThe state-owned company that operates the Spirit of Tasmania ferries will receive a $506 million bailout from the Tasmanian government.<\/p>\n
The major funding injection for TT-Line was announced by Infrastructure Minister Kerry Vincent and Treasurer Eric Abetz on Friday, ahead of next week’s state budget.<\/p>\n
“This equity is not adding to the cost of the project. It is paying for past direct capital cost overruns, and is not TT-Line spending any additional money,” Mr Vincent said.<\/p>\n
“This is about ensuring our vital infrastructure and a key tourism and freight link is supported and continuing to function as Tasmanians need and deserve.”<\/p>\n
He said $200 million would be included in the 2026\/27 budget, while the rest would be in future years.<\/p>\n
The announcement comes as TT-Line continues to wrestle with the financial fallout from its bungled delivery of the new Spirit of Tasmania vessels.<\/p>\n
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Spirit of Tasmania IV pictured leaving Leith, Scotland, in June of last year. (Supplied: TT-Line)<\/p>\n
Last week, a parliamentary inquiry heard the company<\/a> was carrying a “substantial” amount of debt and that its interest repayments were “quite high”.<\/p>\n The same inquiry was also told the ferry replacement program had cost TT-Line at least $717 million more than originally forecast.<\/p>\n The overrun includes an extra $403 million for the building of a new ferry terminal in Devonport compared to the original estimate of $90 million.<\/p>\n The two new ferries have been built while the terminal they need to operate from is still under construction.<\/p>\n Bailout described as ‘long-term investment’<\/p>\n TT-Line chair Ken Kanofski said it was “no secret” the ferry operator was in a very difficult financial position.<\/p>\n The company’s forecasts showed that, without this funding, it would have carried about $1.4 billion in debt by the end of the decade.<\/p>\n “With this injection, we’re anticipating we’ll be carrying about $950 million of debt and we believe we’re in a position to service that debt and pay it off,” Mr Kanofski said.<\/p>\n “This is just like a mortgage on your house. It’s a long-term investment and once we get into that position, the business will pay that debt off over a long period of time.”<\/p>\n Ken Kanofski says he believes TT-Line is in a position to service its debt. (ABC News: Kate Nickels)<\/p>\n He said the funding announced by the government was exactly what the company requested when it put forward a proposal in early March.<\/p>\n Mr Abetz said it was important to invest and provide TT-Line with certainty for its future, as it is a “frontline service” for the state.<\/p>\n “We are doing this by providing TT-Line with equity to reduce its debt and maintain a manageable and sustainable fiscal position,” he said.<\/p>\n The treasurer said Tasmania had a “strong balance sheet”, so it was deemed appropriate for it to take on some of TT-Line’s debt.<\/p>\n He said this would ensure the company had sufficient equity to service the remaining debt and continue operations successfully.<\/p>\n ‘Catastrophic outcome’ for Tasmanians<\/p>\n Labor Shadow Treasurer Dean Winter said the bailout was a major financial blow for Tasmanian taxpayers, which would be felt for generations.<\/p>\n “What this means is that every single year Tasmanian taxpayers will effectively be paying a Spirits fiasco tax,” he said.<\/p>\n “Every year, instead of $30 million going into schools or hospitals, it will be wasted paying the interest on this debt.”<\/p>\n Mr Winter said the injection was an admission that TT-Line was insolvent, as described by the auditor-general last year<\/a>.<\/p>\n He said the impact on the budget would be suffered by Tasmanians through job cuts and reduced funding for schools and hospitals.<\/p>\n “This is a catastrophic outcome for Tasmanians and for our budget,” Mr Winter said.<\/p>\n The two new ferries, Spirit of Tasmania IV and V, are both currently being held in Victoria’s Port Phillip Bay<\/a> before being put into operation at the end of October.<\/p>\n![\"Eric](\"https:\/\/www.europesays.com\/australia\/wp-content\/uploads\/2026\/05\/af9d9dd12485ac0b0bf066f5b42d05d4.jpeg\")
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