Hodgman Government hails cost-shifting accounting and impending Forestry subsidy as achievement

The Hodgman Government continues to be out of touch with the reality of structural challenges facing the logging industry, celebrating a projected improvement to the state-owned logging agency’s bottom line, conveniently ignoring the fact that this is due to taxpayers absorbing millions of dollars of recurring costs.

As part of renaming Forestry Tasmania to Sustainable Timbers Tasmania (STT) Premier Hodgman took on responsibility for funding the organisation’s $158 million superannuation liability, something that cost it $12.5 million in 2015/16. Other historical costs such as road maintenance have also been shifted and the announcement of an impending plantation sale signals a new subsidy of many tens of millions of dollars.

‘Premier Hodgman would be well advised to look closely at the spin of his Minister Guy Barnett. Of course, with shifting massive annual costs across to the taxpayer, the state-owned logging entity’s bottom line looks better, but believing this is due to good management or improved commercial returns would be naïve and dangerous,’ said Vica Bayley, spokesperson for the Wilderness Society.

‘Premier Hodgman continues to subsidise Forestry Tasmania and has done so since coming to Government, including $30 million from TasNetworks in 2015.

‘Juggling finances to absorb annual, recurring expenses then celebrating some fictitious financial turnaround is a delusional and dangerous way to run a Government Business Enterprise and develop public policy. Logging oldgrowth and rainforest reserves like the Blue Tier and Bruny Island, proposed by Premier Hodgman, will only amplify conflict and contestation and further damage brand, certification prospects and finances.’

The announcement that STT has a ‘preferred bidder’ for its pulp plantations signals another massive subsidy is on its way. These plantations are publicly-owned and were established at great taxpayer and environmental expense, privatising them to pay off debt and fund cash flow for SST is a public subsidy designed to prop up loss-making native forest logging.

‘Given plantations are the only profitable sector of the logging industry and the recent revelation they can now be processed into solid timber products that can substitute for native forest-based ones, flogging off publicly-owned plantations to subsidise ongoing losses from native forest logging seems a negligent thing to do.

Vica Bayley Tasmanian Campaign Manager The Wilderness Society (Tasmania) Inc.