Ponzi Government?

It was pleasing to see the burgeoning discussion of the problems confronting the State being attempted in the article Ponzi Government HERE.

But a lot of the assertions were either wrong or exaggerated.

To start with the title of the article is misleading. The current cash flow problems of the State Sector in no way resemble a Ponzi scheme.

Insolvency and Forestry Tasmania

If there are times when Forestry Tasmania’s appears secretive, maybe it’s because it doesn’t always know what’s happening.

It was unaware of its possible insolvent status until it was pointed out by its Lender, Tascorp, the State Government’s finance arm.

Forestry Tasmania’s recently released 2010 financial statements revealed that it had breached lending covenants. The breach which had been overlooked by the Directors was discovered by Tascorp when reviewing the 2009 financials.

Gunns: Is the worst over?

The forest industry’s slow motion train wreck continues its inexorable journey.

There are many, on both sides of the forest debate who appear to accept the urban myth that had it not been for the actions of high profile activists, Gunns’ former CEO would still be ensconced in Lindsay St Launceston.

A quick glance at the ASX announcement on 16th August 2010 outlining Gunns’ achievements in the financial year 2010 reveal that Gunns’ old business plan was a failure. The company’s old model was described as being “a conglomerate of long life low yielding assets…..(consisting of) many businesses….. excessive levels of encumbered assets .....excessive debt levels to earnings,..... (where) potential investors do not understand the business.”

The death of Forestry Tasmania

If Forestry Tasmania was a private company it would now be in the hands of an Administrator.

The recently released financial accounts for the 2009/10 year paint a bleak picture.

Forest industry nonsense

Banks, shareholders and grower/investors have all been traumatised by their recent dealings with forest companies and they’re all reconsidering their position.

The only other major source of much needed capital for the industry are Governments, so it was not a complete surprise to see industry lobbyist Dr Amos launch such a spirited, if at times venomous response ( On TT: Beware of Academics Bearing Arithmetic, HERE ) to attention being drawn to the level of Government assistance already enjoyed by his industry.

MIS an abject failure

It’s like standing in St Peter’s Square awaiting the first wisps of fumata bianca from the Sistine Chapel. The selected stakeholders continue to mull over our fate but are not telling us anything.

What are they discussing?

Forestry Tasmania the stumbling block

FT’s Managing Director Bob Gordon was recently reported in the Mercury HERE as saying, in explanation of FT’s current woes, “(w)e hit an iceberg 18 months ago, we have repaired it and we are back on track again but it is just a matter of how long it takes to see the result on the ground.”

Eighteen months ago, that’s November 2008.