The Liberal Government is committed to rebuilding the forestry industry after Labor and the Greens’ disastrous forest policy put a wrecking ball through regional communities and destroyed forestry jobs.
Growing the forestry industry will help put Forestry Tasmania on a more sustainable path and a detailed review is underway which will identify the changes needed to deliver long-term solutions.
To support the company through this process, the Government has provided Forestry Tasmania with a letter of understanding outlining an equity transfer from Tasmanian Networks to Forestry Tasmania in 2015-16 which will be used to restructure the company’s debt to ensure the business is in a position to action recommendations from the review that the Government may agree to implement if required.
This is a similar system of debt and equity transfer between Government businesses that has been used previously on a number of occasions and involving a number of government businesses such as Aurora, Hydro, Transend and TasRail.
This method of managing financial issues across the Government’s portfolio of businesses is nothing new. This portfolio approach is consistent with the way in which private sector portfolios also operate.
As we have consistently said, we will not support Forestry Tasmania in the same manner that Labor and the Greens did by diverting funds away from vital frontline services like health, education and public safety.
Instead Forestry Tasmania has been directed to manage its business within the confines of its cash flow and the borrowing limit that was put in place by the previous Labor-Green Government whilst a review of its operations takes place.
The Government makes no apologies for funding legitimate community service obligations delivered by Forestry Tasmania, including $2 million for maintaining fire-fighting capacity and $4 million for delivering other non-commercial activities that benefit the community, such as the management and harvesting of special species timbers and maintaining forestry roads to a higher standard than would otherwise be required. These have been provided for in the 2014-15 Budget.
The forestry industry is important to our economy and in particular, the regional communities of Tasmania and we will manage the short-term issues sensibly while planning for a sustainable future for forestry and those it employs.
Peter Gutwein, Treasurer
