Economy
Failed Forestry gets another $110 million. McKim: Wind up money. Giddings: A ‘contingency’ measure
Forestry chief Bob Gordon with his minister, deputy Premier Bryan Green
The Tasmanian Government will spend $110 million over four years bailing out Forestry Tasmania as it determines how the Government business enterprise should look in the future.
Budget papers have revealed that a draft review of Forestry Tasmania’s operations shows it is facing a cash deficit due to low woodchip sales and the closure of mills.
A final report is due in the coming weeks and it may suggest some of Forestry’s functions be taken over to ensure the business is sustainable.
The Premier, Lara Giddings, says the $110 million injection is based on a no-change scenario and is in response to market pressures.
“When I talk to people involved in the forest industry and they tell me about the pain that their own businesses are going through right now in forestry, I assure them that I understand that pain because I too have a business that is involved in forestry and it happens to be Forestry Tasmania,” she said.
• Failed Forestry: John Lawrence and Jarvis Cocker told you so …
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• GREENS’ INITIAL STATE BUDGET RESPONSE
Fiscal Strategy Relaxed While Responsible Economic Structural Reform Maintained
Nick McKim MP
Greens Leader
The Tasmanian Greens today welcomed the injection of flexibility into the State Budget’s fiscal strategy, which will allow Health, Education and the Department of Police and Emergency Services to be quarantined from further budget cuts, and will see $120 million returned to Health through reduced savings targets.
Greens Leader Nick McKim MP said that while a Green Treasurer would have delivered a different Budget to the one released today, this Budget has been ‘greened-up’ due to the constructive influence of the Greens in a power-sharing arrangement.
Mr McKim also said the ground-breaking commitment to phase out battery hen farming, with a transition plan to help grow non-cage industry, delivered on key Greens’ policy and will boost the State’s clean, green Brand.
“Obviously a Budget handed down by a Green government would look different, with more funding in areas like public transport and energy efficiency, instead of things like AFL sponsorship and V8 supercars,” Mr McKim said.
“However, this Budget does seek to look after those doing it tough, and implement progressive policy reforms, while still continuing with the necessary financial structural reform.”
• Greens’ Policy: Fiscal Strategy Flexibility
“The Greens have consistently been on the record advocating that a managed debt approach was our preferred method to balance cost-savings strategies, and minimising impacts upon the community, so we are very happy to see that acknowledged in this Budget by making the fiscal strategy more flexible in a targeted manner.”
“This means that the Health, Education, and Police Departments will be quarantined from making further cuts to meet their savings targets.”
• Greens’ Policy: Battery Hen Ban Commitment Announced
“The Greens took into the Budget negotiations a proposal to announce Tasmania’s intention to become Battery Hen-Free, and provide a transition package to help the free-range and non-cage egg production industry to grow.”
“There will be an immediate ban on any new battery farms or cages, and a cap on the current hen stock introduced, while the transition plan is finalised.”
“This shifts Tasmania in the eyes of the nation and the world. We will be amongst the national and global leaders in banning battery hens, and producing market-friendly eggs.”
“Part of the animal welfare package is also bringing forward the state sow stall ban, which the additional funding will now see happen by mid 2013, instead of the original 2017 timeframe.”
• Greens’ Policy: Cost of Living Prioritised
“The Greens also secured a boost in investment for energy efficiencies for low income households, as well as passenger transport as part of our ongoing commitment to addressing cost of living.”
“We have also secured additional funding of $125, 000 per annum for the next four years to the Council on the Ageing (COTA) Tasmania, to boost policy that benefits the health, wellbeing and quality of life for older Tasmanians.”
• Greens’ Policy: Plastic Bag Ban Funded
“Funding to implement the tripartite supported ban on non-biodegradeable plastic bags has also been delivered in this Budget. We have secured $780, 000 over three years to go into overseeing the ban’s implementation as well as produce education and information materials.”
“This moves a tripartite vote of support for a Greens’ policy initiative into 3-D reality.”
• Greens’ Policy: Coastal Protection Boost
“There has been growing frustration over the lack of an effective Coastal Policy, so in a positive step forward, the Greens have secured $240, 000 to provide dedicated resources to prioritise the delivery of a Coastal protection framework with teeth.”
• Greens’ Policy: Support for Small Business
“We have always said that the small business sector is the engine driver of our economy. So we are delighted to have secured funding to assist in targeted investment to help Tasmanian small businesses leverage the NBN, especially in the area of retail sales.”
“A challenge facing our local retailers is competing with on-line sales where products are sourced from national or international providers. Many of these items can be sourced locally, but many Tasmanian retailers’ on line presence is not competitive.”
“This initiative will provide one-on-one free coaching by specialists in the digital and e-commerce fields, to help boost their on-line presence and retail sale capacity.”
• Greens’ Policy: Education School Viability Assistance Fund
“We have also dedicated $3.5 million over the next two years to support school communities to achieve viable and aspirational education goals for their children and young people.”
• Greens’ Policy: North West Coastal Cycleway Feasibility Study
“This is a major step forward for our policy initiative to see a North-west coastal cycleway be established, as a contiguous route where possible.”
“This funding for a feasibility study will help engage local stakeholders and individuals who have campaigned for many years, for this proposal, which will have positive benefits for tourism, small business, health and recreation.”
“It is important to note that these initiatives and the targeted relaxing of the fiscal constraints, are on top of the important Cost of Living measures that were announced earlier this year and which are already underway.”
“On behalf of the Greens I wish to thank the Premier for the constructive and collaborative manner in which these significant Green initiatives were negotiated and delivered in this State Budget,” Mr McKim said.
Mr McKim will deliver his Leader’s Budget Reply speech next Tuesday.
• TFGA: It’s a kick in the teeth
Farmers pan Tas Budget – “a kick in the teeth”
The Tasmanian Budget contains nothing new for agriculture and is a very disappointing response to the state’s financial woes, Tasmanian farmers said today.
“For our industry, the one that is expected to carry the baton for the entire economy, it’s a kick in the teeth,” Tasmanian Farmers and Graziers Association chief executive Jan Davis said.
“Yes, there is a continued commitment to the irrigation roll-out, yes we have the flagged intentions to manage feral cats and other invasive species, but apart from that there is little.
“Pig farmers are to be subsidised to get out of sow stalls by next year, four years ahead of what we had originally expected, and the government is going to crack down on the number of caged hens.”
Ms Davis said she found it particularly galling that of all the departments to be cut, the Department of Primary Industries, Parks, Water and the Environment should have been last to have been culled financially.
“Yet it carries the heaviest burden of all. It has to find savings of $22 million over the next four years,” she said.
“That is called biting the hand that feeds you.
“In short, there is no new money, no deregulation for farmers, but cuts in services and we face no clearing of new land for agriculture after 2015. That’s when we reach peak farmland, if you like. We run out of paddocks.
“This will come at a time when the rural sector is one of the few that is showing any sign of growth.
“So Tasmania, with one per cent economic growth predicted, half that of the nation, and little private sector investment that results in on-the-ground construction, has a real battle ahead of it.”
Ms Davis she found it illogical that agriculture should have been treated so shabbily.
“We expected better from this government,” she said.
• WILKIE TO HOLD TALKS WITH FEDERAL HEALTH MINISTER IN HOBART TOMORROW ABOUT ASSISTANCE FOR TASMANIAN HEALTH SYSTEM
The Independent Member for Denison, Andrew Wilkie, will tomorrow meet in Hobart with the Federal Health Minister, Tanya Plibersek, to discuss the urgent need for federal assistance for Tasmania’s health system.
“The fact that the Health Minister is flying to Hobart is a good sign that the Federal Government recognises something must be done to soften the impact of the deep cuts to Tasmania’s health budget,’’ Mr Wilkie said.
“The State Government has again taken a scalpel to health in today’s State Budget ordering the sector to cut $100m in what would be a devastating blow to the many Tasmanians relying on the public health system.
“We simply can’t keep shutting hospital beds, cancelling surgery and turning people away from our emergency wards.’’
On May 1 Mr Wilkie met with the Prime Minister, Julia Gillard, in Sydney and discussed the dreadful public health situation in Tasmania. And last week he wrote to her detailing a $400m federal rescue package for Tasmania’s public health system over four years.
“In recent weeks I’ve been in talks with the Prime Minister and other senior members of the Government, as well as with Tasmanian Health Minister Michelle O’Byrne and Premier Lara Giddings, about the urgent need to put Tasmania’s public hospitals on a sustainable footing,’’ Mr Wilkie said.
“Frankly I don’t know if I can succeed in getting federal assistance, but I’m doing everything I can and do hold out hope that the severity of the Tasmanian health crisis, and the unusual circumstances in Canberra, might influence the Federal Government to get involved and help us out.”
• TCT welcomes funding for implementation of the Cat Management Act
Peter McGlone
Tasmanian Conservation Trust Inc
The Tasmanian Conservation Trust today congratulated the Minister for Environment, Parks and Heritage Brian Wightman for his decision to allocate $255,000 in today’s state budget for the implementation of the Cat Management Act, including much needed financial support for the RSPCA and the cat centres.
“The most exciting part of this budget allocation is the Minister’s promise that funding will be provided to assist the cat centres and RSPCA – the people who actually manage cats”, the TCT Director Peter McGlone said.
“After the commencement of the Cat Management Act on 1 July 2012 there will be an increased burden on organizations that manage cats – including an influx of more stray and abandoned cats for them to house, de-sex, adopt or euthanase – and this promise of financial assistance is very welcome.”
The TCT also welcomed some other initiatives in the state budget, including:
– a commitment of funding for reducing the number of plastic bags in Tasmania;
– increased funding to help protect Aboriginal heritage including progressing new Aboriginal heritage legislation by next year;
– funding for a coastal protection and planning framework for Tasmania.
The TCT is perplexed by the allocation of $35 million to Forestry Tasmania which is described some-what mysteriously by the Minister Bryan Green as being to “assist the business through market uncertainty”.
“We call on the Minister to make a commitment that this additional funding is not just going to prop-up Forestry Tasmania by reducing their debt and artificially improving their bottom line but will be used to move the organisation toward a more sustainable and profitable forestry strategy,” Mr McGlone concluded.
• Tasmanian Small Business Council: Tassie’ Budget has some productive outcomes
‘Whilst the fine detail is yet to be produced, Tasmania’s Small Business Strategy seems to have been spared significant cuts in today’s state budget’, said Robert Mallett, Executive Officer of the TSBC.
‘There appears to be a number of initiatives (new and ongoing) which will continue to support the small business sector which are to be applauded however the long term future outlined in the forward estimates spells an extended lean patch for business development in Tasmania.’
‘Initiatives such as Business Tasmania Online should help address the ongoing battle small businesses have with red and green tape. Speedy implementation of the program with empathetic, knowledgeable staff will be the key for this to have real benefit to the vast majority of the small business sector.’
‘Tasmanians have had their say during the recent round of community conversations however it remains to be seen how their sentiments will be converted to positive economic and social policies in the Regional Economic Development plans. They should provide leadership and vision for regional Tasmania but if there is inadequate funding to support the initiatives, the conversations will have been for nought,’ he said.
‘Minister Brian Wightman’s initiative to allocate funds to reduce plastic bag waste is to be commended however details on how this will be done is sketchy and doesn’t outline support measures to assist small retailers to transition to what is at the moment a much more expensive option. Watch this space.’
‘The Digital Ready program which appears to have attracted some additional funding will support the NBN funds already held by influential industry bodies and will enable small business operators to build on their fledgling online experiences and enable them to compete with the rest of the world.’
‘For some however, the increases in road tax and some other statutory charges my just be a cost too much and will make life just that bit tougher. A small cost to be a member of their relevant trade or industry body could be a very worthwhile investment to seek professional support and advice,’ he said.
Robert Mallett
Executive Officer
www.tsbc.org.au
• Budget fails to deliver relief through reform of local government
With the State Government acknowledging the cost of living spiralling out of control and moving to
reduce increases in power costs, Tasmanians for Reform described the Budget as a missed
opportunity to deliver local government reform.
Tasmanians for Reform spokeswoman, Mary Massina said the State Government had the power to
ease the pain on the long suffering Tasmanian community of continual rate increases and refer the
issue of reform to the Local Government Board.
“The Government now has a chance to come out on the issue of local government reform and go
even further to offer relief for the community and small business throughout the state,” Ms
Massina said.
Ms Massina said local government’s own figures as part of the Southern Tasmanian Councils
Authority report in local government reform showed up to 15 per cent efficiency in services alone
can be gained if a Greater Hobart Council is created.
“A 15 per cent saving in the cost of operating local government could have saved consumers up
$90 million each year,” Ms Massina said.
“The community are fed up with spiralling charges and they are fed up with local government rates
bills continually on the rise, the State Government has shown they are prepared to do this with
power bills and now is their opportunity to do it with local government.
“Not only could local government reform lead to cheaper rates but also better services and
increased capacity, which would be good news for the local government sector but also good news
for Tasmania.”
Tasmanians for Reform is the largest coalition of its kind in Tasmanian history, with peak
organisations representing chemists, car dealers, plumbers, hoteliers, real estate agents, small
businesses, hair dressers and butchers, just to name a few.
• TCCI:
The TCCI has expressed serious concerns at the continuing deficit funding of the
State Budget, a net debt position and the failure of the State Government to
address the issue of unfunded superannuation liability.
TCCI CEO Neil MacKinnon said the since the TCCI Business Expectations Survey
was launched some years ago there is a very clear correlation between business
confidence and State Government fiscal management.
“Balanced or surplus Budgets give rise to increased business confidence, deficit
Budgets erode business confidence,” Mr MacKinnon said.
“When they are confident Tasmanian businesses, which are the wealth creators,
invest and employ.
“When confidence is eroded they tend to do neither.”
The 2011/12 State Budget sees a $289 m. deficit and for the 2012/13 this will be
$283 m.
“Running consecutive budgets with in excess of $250 m. in deficit, no reduction in
the unfunded superannuation liability and a net debt position is of serious concern
to the business community,” Mr MacKinnon said.
• Jenny Webber …
Media Release
18 May 2012
Tasmania’s forest industry boost a waste of taxpayers money
Huon Valley Environment Centre, Still Wild Still Threatened and Code Green has expressed outrage at the Tasmanian Budget announcement that Forestry Tasmania will receive a $110 million cash injection.
‘Premier Lara Giddings’ ‘budget with heart’ heartlessly feeds Forestry Tasmania with money that could have been provided to the ailing health and education systems,’ Huon Valley Environment Centre’s Jenny Weber said.
‘The State Government cannot justify budget cuts of $100 million from Health in last year’s budget when it insists on taxpayer funded bailouts for Forestry Tasmania. Forestry Tasmania is an organisation that has consistently run at a loss for many years and is actively responsible for tarnishing Tasmania’s clean green brand internationally,’ Jenny Weber said.
‘Forestry Tasmania and the native forest industry it has created are internationally obsolete and unacceptable. Forestry Tasmania must be disbanded and a new specifically designed institution be established to manage a restructured forest industry. For a modern sustainable logging industry we need to start from scratch with a purpose designed agency,’ Still Wild Still Threatened’s Miranda Gibson said.
‘Why should Tasmanians continue to pay for Forestry Tasmania’s inefficiency when it dogmatically pursues an archaic brand of native forest harvesting that has no place in this day and age. The State Government’s budget stated that prospects for forestry and forest products remain very weak,’ Miranda Gibson said.[1]
The Intergovernmental Agreement (IGA) initiative has exposed the fact that market conditions for the Tasmanian forest industry will not improve unless there is a major restructure in the industry and a marked transition away from native forest harvesting. Giving Forestry Tasmania $110 million to conduct business as usual is counterproductive to the IGA process.
‘Premier Lara Giddings decision to continue bailing out Forestry Tasmania in the face of a final report is incongruous. The current inquiry is likely to suggest major structural changes. Durability for the failed government business enterprise could well fuel the unsustainable destruction of these magnificent forests.’ Code Green spokesperson Jared Irwin said
• Forestry Tas budget allocation reinforces case for reform
The $110 million Forestry Tasmania funding allocation in yesterday’s State Budget reinforces the call for urgent agency reform, The Wilderness Society said today.
“The $110 million budget allocation for Forestry Tasmania builds on the compelling case for the government agency to be overhauled to deal with systemic failures in the current model,” said Wilderness Society Tasmanian Campaign Manager Vica Bayley.
“Like most taxpayers, we are concerned about this budget allocation and seek clarity on its purpose and how it relates to the much needed reform process.”
Mr Bayley also noted Forestry Tasmania’s unfunded superannuation liabilities and the apparent inability of the agency to meet basic obligations.
“Taxpayer funding to prop-up a failed business model in Forestry Tasmania cannot be tolerated and people should be concerned about basic obligations that go unfunded.”
The dire situation of Forestry Tasmania also highlights the significance of the Forest Agreement and current negotiations.
“This provision in the budget also points to the importance of Forest Agreement negotiations and the need to find agreement around forest protection, industry and community outcomes.”
“We need a solution that protects identified native forests, supports the community through ongoing change and sets the timber industry onto an economically, socially and environmentally sustainable footing.”
• Nick McKim: This is wind up money …
FORESTRY TASMANIA RESTRUCTURE THE PRIORITY
Nick McKim MP
Greens Leader
Friday, 18 May 2012
The Tasmanian Greens today said the party would not support any taxpayer money being given to Forestry Tasmania in its current form.
Greens Leader Nick McKim MP said that the Greens remain firm that Forestry Tasmania should be scrapped, and that the land and trees that it currently manages be returned to the control of the Tasmanian people.
“There is no way that the Greens will ever support more taxpayers’ money being handed over to prop up this failed agency in its current form,” Mr McKim said.
“The Greens have an expectation that this is wind up money, not prop-up money.”
“The Premier has given an assurance that not one dollar of the contingency allocation will flow to Forestry Tasmania prior to the URS process being complete.”
“The first stage of the URS report made it clear that Forestry Tasmania was a failed enterprise, and the Greens clear expectation is that it will be restructured as soon as possible.”
“The land and the forest that are currently owned by Forestry Tasmania need to be returned to the Tasmanian people, and the only way to do that is to bring it all back under Departmental control.”
“What is alarming here is that Forestry Tasmania has been so badly managed for so long that Treasury was legally required to set aside $110 million as a contingency.”
“Tasmanians have a right to know exactly what these obligations are taxpayers, and why Forestry Tasmania has been allowed to get itself into the mess that it’s in.”
• Lara Giddings, MP
Premier
Friday, 18 May 2012
Forestry Tasmania contingency measures
The Premier, Lara Giddings, today stressed that $110 million contained in yesterday’s Budget and Forward Estimates was a contingency measure.
The contingency provision of $35 million in the coming financial year and $25 million over the forward estimates is based on independent advice from URS about what might be required under a “do nothing” scenario.
“As a Government we have legal obligations to our Government Business Enterprises and the support for Forestry Tasmania is in line with those obligations,” Ms Giddings said.
“This only reinforces the importance of the URS Review of Forestry Tasmania which is due to provide its stage two report to Government within weeks.
“We know that Forestry Tasmania is dealing with the same market pressures confronting the rest of the industry.
“These pressures relate directly to a downturn in export markets, the high exchange rate and broader industry restructuring.
“This has nothing to do with the $276 million Tasmanian Forests Agreement, which is a response to those challenges, not the cause.
“The URS report will provide options for us to consider about how to respond to these challenges for the future.”
The funding has been appropriated to Finance General and would only be released to Forestry Tasmania on a progressive basis after an assessment by Treasury of Forestry
Tasmania’s financial situation.
Ms Giddings said no money would be provided to Forestry Tasmania before the URS review into the business is completed.
• Bryan Green, MP
Deputy Premier
Friday, 18 May 2012
Return of FIAT to forest talks welcomed
The Deputy Premier Bryan Green today welcomed the return of the Forest Industries Association to the negotiating table to progress the Forests Intergovernmental Agreement.
“It is crucial for all signatories to genuinely work towards an agreement that will provide a lasting solution,” Mr Green said.
“It is encouraging FIAT has decided to rejoin the talks in an effort to achieve a resolution that will enable our forest industry to move forward.”
First published: 2012-05-17 05:24 PM
• Mike Adams at the zoo …
Signboard at Taronga Park zoo’s elephant house. This in response to comment no 45, from MJF …