The Tasmanian Government has increased the level of debt it will guarantee for the state-owned forestry business. Source: ABC News
Tasmanian Treasurer Peter Gutwein has revealed he signed off on another Letter of Comfort for Forestry Tasmania (FT) in February, increasing the debt level covered by $10 million to $41 million.
The letter allows FT to rack up more debt by assuring its lenders that taxpayers will repay the debt if the business falters.
Forestry Tasmania is currently $30 million in debt.
In a fiery exchange, Greens MP Nick McKim questioned how the Treasurer expected FT to pay back the money.
“The simple fact is that logging native forests is a loss-making enterprise, and there is no realistic prospect of that changing in the future,” Mr McKim said.
Mr Gutwein said Mr McKim was ”coming across thicker than I thought you were”.
He expected Forestry Tasmania to become financially viable in two years.
“The sale of hardwood assets is going to underpin this,” Mr Gutwein said.
He would not put a figure on the potential value of the hardwood estate being prepared for sale by FT.
“I’m not going to speculate on the value of the hardwood plantations,” he said. “That would only serve to limit or cap the opportunity in respect to that sale.”
Forestry Tasmania will also get a $30 million equity transfer from the state-owned energy business TasNetworks.
The reassurance was initially issued in 2009 to allow the state-owned lender Tascorp and Forestry Tasmania to negotiate new lending arrangements.
Greens treasury spokesman Nick McKim said Mr Gutwein had repeatedly failed to explain how Forestry Tasmania could ever pay back the money it owed.
“It’s now clear that Mr Gutwein has no plan for Forestry Tasmania except continuing to throw public funds at it and allowing it to rack up debts and sell assets.”
