David Symons this week in
the Fairfax media canvassed the worth of Gunns and suggested it’s only got 4
months to sort out the restructure proposal else it may find itself in breach
of its banking covenants (HERE).
A bit like FEA at the
But what are these banking covenants? How do they
Oh what a tangled web we
weave, when first we practise to deceive.
The slow and tortuous wind up of the MIS companies
Great Southern and Timbercorp has laid bare the legal complexities that were
not envisaged by the Masters of the Universe who first created the monsters.
But it’s getting worse.
If Eucalyptus Nitens are causing toxicity problems
in the Georges River area, then maybe the owners of the trees should be getting
a little twitchy.
Transparency may not be
Paul Lennon’s abiding legacy, but that was the stated intention of the Charter
of Budget Responsibility Act 2007 enacted during the ex Premier’s unforgettable
The CBR Act requires a Government to set out its
fiscal strategy and to report its performance at regular intervals.
It also requires Opposition parties to release a
fiscal strategy at election time.
The purpose of a fiscal strategy statement
according to the Act is to establish a benchmark for evaluating the
Government’s fiscal performance; and increase public awareness of the fiscal
policies of the Government and Opposition parties.
In an earlier article
covering issues facing the Tasmanian economy in these pre election times (HERE: Our economic black hole), the matter of the Government’s little known but
very large overdraft was examined. The latest Mid Year Financial Report shows
the State’s net cash reserves plummeting to $313m by 2012/13 despite the fact
that the Superannuation Provision SPA a/c should show a balance of $1,589m by
Whilst Treasury no doubt has a conservative and
achievable plan to reduce the overdraft, the so called temporary Debt Repayment
a/c, and at the same time provide for the extinguishment of the unfunded super
liability by 2035, it is not at all clear that Mr Bartlett’s current spending
spree is based on the Treasury plan or indeed if Mr Hodgman’s plan to abolish
taxes can be accommodated within that same plan. Without further info, we are
all in the dark. As shareholders in Tas Inc it is a little unnerving.
In this second part a search for the ‘black hole’
that we were warned about as little as 12 months ago will be attempted. What
happened to the State’s income as a result of the GFC, and how will the policy
decisions and promises that have occurred recently affect this level of income?
Most credible plans will attempt an analysis of the
past before attempting to outline a future course of action. The description of
the past is skimpy and the analysis non-existent. It’s a little hard to give
credence to the new Plan built on these foundations.
There is, however, one conclusion that is very
“Sawing trials have concluded that E.nitens
plantation stock is unsuitable for, and uneconomical as, a source of wood for
appearance grade sawn products. This is because of the considerable degrade
associated with the seasoning process (in particular, surface checking and unrecovered
collapse). .............. Unless these challenges (associated with processing
plantation timber) are overcome, a large proportion of the current Tasmanian
hardwood production industry is unlikely to be able to profitably or
sustainably process plantation sourced logs into high grade products.”
Basically, FFIC has led the industry up the wrong
path. Or maybe I should say the path that FFIC has been following is now known
to be the wrong one.
ABC News (HERE) reported Will Hodgman as saying the Greens’ policy
would bankrupt the state.
The Tasmanian Opposition has ridiculed the Greens
for promising to abolish poker machines.
Tasmanians lose about $220 million a year on poker
machines, while the Government reaps about $55 million in revenue, or 7 per
cent of State tax receipts.
The Greens say they want to phase out pokies within
five years, leading to fewer problem gamblers and big savings.
However Liberal leader Will Hodgman is sceptical.
“Most Greens policies are right out there in the
Never-Never, they bear no practical resemblance to what’s achievable….........
it’s very easy for Mr McKim to come out and make these wild statements [but]
how is he going to bring these policies into effect, without bankrupting the
It is not immediately clear why abolishing land tax
of about $80m or 10% of the State’s tax receipts over 8 years won’t create an
even larger problem.