Joining the dots

‘Twas the announcement by Gunns on 1st July that further write-downs of its forestry assets were needed in the current environment that has shed a little more light on the problems confronting the Tasmanian forest industry.

The announcement gives a little more context to the going concern deliberations currently occupying the minds of both Gunns’ and FT’s Directors.

Tasmania's decisions

Matthew Denholm’s short opinion piece in the latest Weekend Australian on Tasmania titled ‘Governance, the economy and culture need a total overhaul’, was a welcome addition to the discussion about our future.

It was a short piece so it would be unfair to criticise the lack of supporting arguments but there were three points which warrant a comment.

Plagiarism and the grand hoax

 

I can’t recall such a high reading.

Mr Hodgman’s Fiscal Strategy for the Future appended to his Roadmap to Recovery and Growth when subjected to a plagiarism check almost resulted in system failure, worse than Geiger counters at Fukushima.

Mr Hodgman’s colleague Mr Groom lavished praise on his leader, saying it ”has been described as the most comprehensive response to the budget in Tasmanian history”.

The most comprehensive cut and paste in Tasmanian history perhaps?

Where to tasmania?

Two months ago the problems facing the State Government were outlined with a detailed examination of cash inflows and outflows in the General Government Sector over a 9 year period including the then Forward Estimates: State of the State: What your mother didn’t tell you, graph by graph.

This note proposes to update the information as a result of last week’s Budget, to see what effects if any may ensue.

Wilful blindness and the new forest industry

Just what is happening with Gunns?

On 15^th May 2012 it requested ASX extend its listing suspension pending recapitalisation which it anticipated might take an indefinite period.

Gunns advised that

·        The Victorian Heyfield timber mill sale agreement was finally executed. The enterprise value was reported at $28 million.

·        The sale will end native forest operations for Gunns in Victoria following similar moves in WA and announced intentions in Tasmania.

·        The sale of Green Triangle assets was proceeding (as it has for the last 12 months)

·        Indicative offers had been received for the mainland plantation assets (in other words the Great Southern MIS management rights) and the Portland woodchip facility and a structured sale process had commenced.

·        Mr L’Estrange had his term extended until 31^st December 2012.

Feathering nests or furthering tassie....?

Not everyone it seems is fully aware of the scale of funds flowing into Federal Hotel’s coffers each year from gambling. It’s all publicly available information, from the Tasmanian Gaming Commission Reports and ASIC returns lodged by Federal Hotels’ parent company Mulawa Holdings Pty Limited.

For the year 2010/11, player losses for table gambling, keno and poker machines (EGMs), the 3 leisure pursuits covered by FH’s monopoly license started to flatten out a wee bit, $256.9 million compared with $253.2 million in the previous year. Pubs and clubs (excluding those owned by FH) ended up with $16.3 million (6%) from commissions net of EGM machine hire and promotion fees, the Government $59.5 million (23%) in taxes and license fees whilst the balance of $181.1 million (70%) landed in FH’s lap.

Forestry Tasmania's shrinking estate

Forestry Tasmania is not as bad as Geoff Law suggests in a recent posting Forestry Tasmania: A compelling case for reform: HERE.

It’s far worse.

The sale of Taswood Growers’ 46,000 hectare softwood plantation estate of which FT was a 50% joint venture (JV) partner was just another indecent hasty grab for cash, much like the TOTE sale.

Whilst we still own the land we will get no rental return for the next 57 years.