The Independent Member for Denison, Andrew Wilkie, has called for a Royal Commission to explain the financial collapse of Forestry Tasmania in a damning speech to Federal Parliament today.
Mr Wilkie’s speech follows in full and was delivered in the Federation Chamber of Parliament House in Canberra today at 12.54pm.
It can be viewed here
Well it could be viewed once ... it’s now a broken link ... so go: HERE to see it (it’s rivetting) ...
``Deputy Speaker I am often approached by constituents with concerns about forestry practice in Tasmania. Their concerns are widespread, but most often centre on the environment, as well as politicians and the mistakes they make.
Curiously though, not all of the disgruntled members of the community approaching me are environmentalists. Indeed some are strong supporters of forestry in Tasmania concerned that the industry has evolved in unsatisfactory ways to the point where the forests have been overworked, and many of the associated businesses have either gone broke or been made marginal at best.
A particular concern is Forestry Tasmania, which is the Government Business Enterprise responsible under State legislation for managing the forests. It was established in 1994 with no debt, paid tax, generated positive returns and cash flows, and held assets of $2.227 billion.
However it’s been run down progressively to the point where, by some estimates, since the late 1980s over $359 million in taxpayers money has had to be injected into FT and its predecessor the Forestry Commission. This includes the $23 million State Government bailout in FY 13/14 and an equity transfer of $30 million planned for FY 15/16.
And that $2 billion plus in assets, what happened to that? Well the most recent FT report puts it now at $237.5 million, almost $2 billion less than what the enterprise started with not all that long ago.
Deputy Speaker this matter is very complex and needs much more than the five minutes I have here today. So, to assist the Parliament, I seek leave to table relevant material prepared by Mr John Hawkins from Northern Tasmania.
Deputy Speaker what FT’s worth now is anyone’s guess. Mr Saul Eslake apparently put it at $25 million in 2006, although the fact that the enterprise is effectively insolvent probably makes it worthless as a business nowadays. Nor can the potential value in all those trees solve FT’s woes because the value of the standing timber is down to $86.083 million while FT’s debt sits at about $221 million.
‘In my opinion the first witness should be Mr Evan Rolley…’
Exactly how Forestry Tasmania got itself into this diabolical mess has never been determined, or at least never revealed. Yes, the State Government has recently reviewed the enterprise and announced some changes. But the reasons for the mess have never been aired publicly, despite the fact that literally billions of dollars of public money has been squandered across many decades on the Tasmanian forestry industry if you add up all the state and federal grants, the tax breaks on the managed investment schemes and the depreciation of the assets. Indeed just the sum of all the State and Federal Government grants alone has reached a whopping $780 million since 1997.
Frankly Deputy Speaker what’s needed now is a Royal Commission, or a Commission of Inquiry, to finally get to the bottom of this and to hold people to account. Surely that’s what’s needed, a proper inquiry, with broad terms of reference and the power to compel witnesses to front up and explain themselves. Yes, this would be a big deal and costly. But the FT disaster is no small matter because, to this day, virtually nothing is known of the decisions made by those responsible for the enormous waste of public funds and abject failure of business, governance and public administration.
In my opinion the first witness should be Mr Evan Rolley who was the Managing Director of FT from 1994 until 2006. He’s now the Executive Director of Ta Ann Tasmania Pty Ltd and would also be able to help an inquiry understand why taxpayers then went and paid $26 million to that company. A succession of Premiers and relevant Ministers should also explain themselves.
Deputy Speaker I support a Tasmanian forestry industry so long as it pays its own way and stops damaging the environment. Whether or not that includes FT remains to be seen. But what is clear is that we are bound to repeat the mistakes of the past unless we do something about it.’’
• John Hawkins, in Comments: Andrew, Thankyou. You are exactly the type of representative that the public of Tasmania requires in our three party parliament. Independent, straightforward and compassionate. Andrew please push and push hard for a Royal Commission into Forestry Tasmania.
• John Hayward, in Comments: If only we had a Federal Parliament that wasn’t complicit. I would hope a Royal Commission would have a good look at the 2010 audit of FT by US forestry auditors James W Sewall, which valued FT’s State Forest timber stocks at zero because they had no record of making money, and also pointed out that FT was errant in claiming the 1,47m ha of State Forest Land as an asset because they did not own it. They valued FT at zero. It would also be a good opportunity to examine the bizarre 2000 exchange of land between FT and the Crown wherein FT acquired freehold title to 77,809ha of formerly Crown land State Forest plantations (which it already managed) which FT was supposed to have received in exchange for land of equal value it supposedly surrendered to the Crown. No one has yet identified any land surrendered to the Crown, much less freehold needed to match its own freehold windfall. Stay upwind of this one ... and well done J Hawkins
• Kev Rothery, in Comments: Good on both John Hawkins and Andrew Wilkie for this. Andrew is without doubt the best federal MP in Australia. This really should not stop with FT though; a full RC investigation of the corrupt forestry fiasco in Tasmania must also include the full histories of Gunns Pulp Mill and the MIS shambles. How can we make sure this inquiry eventuates and doesn’t just disappear into Parliament’s Hansard?
• Isla MacGregor, in Comments: … Andrew’s speech in Parliament provides an opportunity for CEO Dianne Merryful from the Tas Integrity Commission, in the absence of any newly appointed Commissioner, to establish an Own Motion Investigation into Forestry Tasmania. If the TIC won’t conduct a thorough inquiry into FT, then the people, including Andrew, need to make a public call of No Confidence in the Tasmanian Integrity Commission and its officers and call for its immediate closure. Without a fully empowered and capable TIC, it will continue to be futile for politicians or citizens repeatedly calling on any Governments - be they Abbott, Hodgman, Giddings, Bartlett or Bacon to hold either a Royal Commission or Commission of Inquiry into FT.
• ABC: Tasmanian MP Andrew Wilkie calls for royal commission into Forestry Tasmania … Tasmania’s Resources Minister, Paul Harris(sic), dismissed Mr Wilkie’s calls. In a statement, Mr Harris said the Government was already reviewing Forestry Tasmania and did not support a royal commission.
• phill Parsons, in Comments: Well Tasmanians here you have it, a $2.2Billion dollar asset squandered. Imagine if that asset had returned an amount that the shareholders of any well managed private company with such assets could have expected. Health well funded, education well funded, affordable housing, even sufficient Police. Instead the asset has been stripped and the pockets of other parties lined with its former value. There can be no other conclusion. The employees of FT are not rolling in it, the forestry contractors plead poverty when the industry collapsed and Gunns shareholders took a bath. An inquiry would inform us but will the same sheep vote for another dipping at the next election when Harriss and Hodgman waffle on about a new future when we have not understood the past. Time to out the crooks and set in place the processes to prevent a relapse which appears to be occurring, albeit on a smaller scale, with the ongoing handouts.
• ABC: International interest raises prospect of pulp mill being built in northern Tasmania An international buyer for the multi-billion dollar pulp mill project in northern Tasmania has emerged. Since the 2012 collapse of timber giant Gunns the Bell Bay pulp mill has been a parentless project. Receivers for Gunns have wanted to sell the pulp mill licence and the Tamar Valley site together or else accept an offer for the land only, which would void the permit. They have fielded at least one binding offer for the licence from overseas as well as land-only offers from Australian companies. KordaMentha spokesman Mike Smith would not confirm the number of bids. … Tasmanian Labor leader Bryan Green welcomed overseas interest in investing in the state. … Resources Minister Paul Harriss said he looked forward to the process being finalised. …
MEANWHILE ... the push to include The Liquidation of Nature in the RET continues ...
• REneweconomy: Burning ambition; Why the forestry industry needs the RET … Small-scale projects would eventually lead to large-scale biomass projects, whether through co-generation, conversion or building new plants. Unsustainable logging would continue and increase, and along with it the loss of biodiversity, including threatened or critically endangered species like the Leadbeater’s Possum, the Swift Parrot, and the koala in SE NSW. If we don’t call a halt to current bad management regimes, and especially if we allow a native forest biomass industry to take off, eventually our forests will be converted to plantations of fast growing commercially viable species which lack any meaningful natural values. The industry push into national parks, and on steeper slopes and water catchments will continue, and carbon pollution will increase, whether or not the government chooses to account for it. This is at a time when all of Australia’s timber needs can be met by plantation wood, and our native forests can be restored and retained as carbon stores, water purifiers, habitat for wildlife and destinations for tourists. Meanwhile the world is quickly moving away from polluting industries. If Australia establishes another polluting, carbon intensive industry, it risks having large empty generators which can only burn coal or wood, when both will eventually be consigned to the dustbin of history. Can we dare to hope that the cross benchers will do what the government seems incapable of doing itself and vote to reject the change to part 4 of the RET legislation that includes native forest biomass as a source of renewable energy, eligible to attract Renewable Energy Certificates?
• Pete Godfrey, in Comments: On the issue of the phoenix like rise of the Tamar Valley Pulp Mill proposal. Seems odd that only the local ABC have picked the story up, even odder now that the wood supply has been sold off and is rapidly being shipped overseas. I am wondering if it is a massive Gazumping attempt by Korda Mentha or if Bryan and Will have had dinner together, and told the prospective fools that are offering to buy it that they can have the native forests for a song.
• Anne Layton-Bennett, Bev Ernst, Lucy Landon-Lane: Community opposition to the pulp mill remains strong
Responding to the latest announcement made by KordaMentha -receiveers of failed timber company Gunns Ltd - that it has fielded “at least onbebinding offer for the pulp mill licence from overseas”, community groupsFriends of the Tamar Valley and Pulp The Mill once again remind KordaMentha that community opposition to the pulp mill has not suddenly disappeared, but is just as strong now as it was when the Project wasfirst proposed over ten years ago, due to the inevitable detrimental effect it will have on the health and wellbeing of everyone living in the valley.
“Any investor seriously considering purchasing the pulp mill licence and site should realise opposition to the Tamar Valley pulp mill certainly didn’t end with the collapse of Gunns, and there will continue to be strong and determine4d community resistance to any company with plans to build it, said spokesperson Anne Layton-Bennett.
“Given Gunns’ timber assets have now been sold to the New Forests company, which has repeatedly stated they have no interest in building a pulp mill, permits for the mill can only be considered all but worthless. With no ready access to plantation feedstock for a pulp mill how can any serious investor possibly consider it a viable prospect?
“Tasmanians have been told countless times there are buyers “interested” in the pulp mill, yet no serious investor has ever materialised. There’s a very good reason for that. Quite apart from the corrupted approval process the pulp mill never made economic sense, and no proper risk assessment has ever been undertaken,” Ms Layton-Bennett said.
“It’s time the pulp mill permits were declared void, and both KordaMentha - and the major political parties - recognised the pulp mill dream is over. It will never be accepted by the community, and for the majority of Tasmanians the pulp mill has been nothing but a ten-year nightmare,” Ms Layton-Bennett concluded.
(Given the high incidence of power outages do we really want to risk this type of situation occurring in the Tamar Valley and Launceston?)
• John Hawkins, in Comments: Editor, I have submitted an offer of $550 for the Pulp Mill permits to include GST. Do you think Korda Mentha are using this to increase the sale price?
• Pete Godfrey, in Comments: #49 Alright Gary, Zombie like it is. This whole pie in the mud project has been a bunch of lies from woe to go. Remember all the lies the now OA ex premier told us, the continuous lies that the CEO of Gunns told us about hedge funds, prospective buyers, it is all ready, it will be starting soon. Just for the lies of those two there should be a royal commission, and also charges laid by ASIC. Now we have Korda Mentha carrying on this obscene tradition.