The State Government has not ruled out giving more money to prop up cash-strapped Forestry Tasmania (FT). Source: ABC News
The Government has confirmed a $30 million equity transfer will keep the Government company solvent as it borrows up to $31 million this financial year to stay afloat.
Government company TasNetworks revealed it would give up to $30 million next financial year to the loss-making forestry company in an equity transfer.
The State Government rejected Opposition suggestions it had broken an election promise to stop bailing out the company with taxpayers’ funds, saying the money was not coming from consolidated revenue, and was not a subsidy.
The Treasurer, Peter Gutwein, did not rule out further transfers.
“Look, I’m not going to speculate on what the future might hold,” he said. But he said there was no concrete plans to give FT more money.
“We are certainly not planning for further equity transfers.”
Forestry Tasmania is asking Tasmanians to have faith the company will eventually return to profitability.
Chairman of the state-owned forester Bob Annells said the loss-making company had fundamentally changed how it did business.
He told a parliamentary hearing he was optimistic a long spell of tough times for the timber sector would soon end.
“But I guess it’s a question of faith,” Mr Annells said.
Opposition Leader Bryan Green accused the Resources Minister Paul Harriss of breaking his promise to cut subsidies to Forestry Tasmania.
During a fiery exchange with the Opposition Leader, Mr Harriss denied anyone had been misled.
Forestry Tasmania has not been able to balance the books. The company lacks export ports in Burnie and in the south, has struggled to find reliable markets for residues and has battled a high dollar.
The bid to get certification from the Forest Stewardship Council (FSC) remains up in the air. Green groups are lobbying certifiers not to sign off on Forestry Tasmania’s practices.
“We think that Forestry Tasmania doesn’t comply with FSC and that they don’t deserve a green tick of approval,” said Markets for Change CEO Peg Putt.
Despite the challenges, the company’s board is optimistic.
“So I guess it’s a question of faith. Do you want to believe that this industry can continue?” Mr Annells said. This would be a gamble for thousands of Tasmanians whose livelihoods depend on the company’s survival.
Treasurer Peter Gutwein denied he should have disclosed a secretive equity transfer earlier. He insists the $30 transfer to Forestry Tasmania is not a subsidy.