Laughs of Launnie comedy festival's outstanding creditors have been paid with taxpayer funds.
A spokesman for Treasurer Peter Gutwein said the parties had signed a second deed and all outstanding creditors had now been paid.
"The government has acted on advice from the department and the funding has been administered by the department in accordance with the same arrangements that apply to other events," the spokesman said.
The Examiner revealed in May a number of comedians and staff who worked for Laughs of Launnie festival weren't paid within their contractual deadlines.
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Right to information documents released to The Examiner revealed the festival originally asked the state government for a $215,000 grant, but was only given $120,000 from the State Growth Department.
The documents - which included a profit and loss statement from September 1, 2018, to May 5, 2019 - showed no evidence the budget was adjusted after the festival received almost $100,000 less than their original request.
The festival racked up debts amounting to almost the exact shortfall, which the government agreed to pay to the tune of $91,784.
The additional funds were granted by the state government under the conditions that no directors, or anyone immediately related to them, directly or indirectly receive any of the additional funds to be provided.
If the event should occur again, or if the intellectual property for the event is used or sold, event organisers must begin discussions regarding options to repay the state, under the new grant conditions.
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The Treasurer did not respond to questions about whether he supported the festival going ahead in 2020 and whether the government would consider giving the festival another grant if it was to go ahead.
The festival also received $20,000 from the Launceston City Council, and $10,000 from regional councils to put on shows at Deloraine, St Helens, George Town, Scottsdale, and Devonport.
In the lead-up to the March event, it was advertised international, national and local artists would 110 shows to be held over six days.