NORTHERN Tasmania is only just starting to realise the economic impact from the collapse of former timber giant Gunns Limited, says Launceston financial analyst Tony Gray.
"The bad debt impact has impaired the balance sheet and cash flow of all those people who did work for the company in the state and impacted on business confidence," Mr Gray said.
He was commenting on the latest report detailing Gunns' financial viability at the time when administrators were called in and receivers were appointed last September.
The information was contained in a report to creditors prepared by Melbourne- based administrators PPB Advisory sent out before the second creditors' meeting scheduled for next Tuesday at the Boathouse, on Launceston's Northbank.
The administrators found that it was unlikely that there were sufficient funds left in the company to pay its lenders' debt of $446 million or to pay unsecured creditors' claims totalling more than $2.4 billion.
They recommend liquidating all Gunns companies.
Mr Gray said that he believed a large portion of the $2.4 billion debt to unsecured creditors was to interstate companies.
But the Tasmanian community still did not know the detail of people who had already "gone broke" because of the Gunns wind-up, Mr Gray said.
"Some of them have already sold out of business and shifted their whole operation interstate," he said.
"Some have already scaled back on work and employment.
"When they scale back to that degree, it takes a long time for recovery - when businesses are working to pay off debt because of the money they have lost, they are not spending it on growing the business or employing people."
Mr Gray said that the impact of the Gunns collapse on small business had contributed significantly to the state's industrial collapse.
"It's the ripple effect that we are talking about - Tasmania is deeper in recession and will come out of it slower," he said.
Secured creditors include ANZ Capel Court Limited, Australia and New Zealand Banking Group, Macquarie Bank, National Bank, Gunns Finance Trust, Whiffen family trust and Wesley Vale Engineering.
Unsecured creditors include Australian Executor Trustees, owed approximately $39 million; ex Great Southern MIS Schemes, $22 million; Les Walkden Enterprises, $3.5 million; Trust Company Australia, $2.9 million; and Timberlands, $1.9 million.