Forestry Tasmanian has posted a $67 million loss in its latest annual report released on Tuesday, after achieving a $31 million profit in the previous financial year.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
In the wake of this massive loss, the government on Wednesday will release a plan that will detail the future of the company on Wednesday.
The state-owned company has already foreshadowed that it will need to borrow money this financial year to fund any operating deficit as it moves to a new business model.
The government has agreed that the borrowings could be repaid through the sale of its hardwood forests.
The company has attributed the loss to a revaluation of its forest assets and its large superannuation liability.
The annual report showed that the government provided $20.7 million to the company in 2015-16 and $55.5 million over the past three years. Full-time equivalent employee numbers were reduced by 73 between April and July last year.
Forestry Tasmania’s board has made a number of propositions to the government to become commercially viable, including a further reduction of staff, lowering minimum sawlog quota, selling off hardwood plantation, and divestment of tourism assets.
Resources Minister Guy Barnett said the board’s option to reduce timber supply to sawmillers and the processors by 25 per cent would potentially cost 700 jobs.
He said the company’s financial loss strengthened the government’s argument to open up to logging areas reserved under the Tasmanian Forest Agreement.
“The business model for Forestry Tasmania is broken and it’s broken because there is a lack of resource,” he said.
Opposition Leader Bryan Green said Labor would not support the sale of the company’s hardwood plantations. “How can it be smart when you are facing insolvency to sell off your only profit-making opportunity for a short-term gain?” he said.
He said logging the 400,000 hectares currently under reserve would hamper the government’s pursuit of Forest Stewardship Council certification and future timber sales. Greens leader Cassy O’Connor said the logging of reserved forests was a deliberate election ploy.
“At no point, did the board suggest that we go into the 400,000 hectares so what we know is that this is purely a political ploy by the Liberals to pick a fight over forests in the lead-up to the next election,” she said.
