Wednesday, 17 December 2014

Hydro praying for rain


There was more than a hint of Donald Rumsfeld’s maxim of ‘known unknowns’ when new Chairman Grant Every-Burns spoke of challenges facing Hydro Tasmania:

“The corporation is impacted by the well understood uncertainty around carbon pricing, renewable targets and rainfall variability. We are able to predict with certainty that the Hydro will be impacted for some years into the future.”

Hydro Tasmania appeared before a House of Assembly committee two weeks ago.

Scrutiny hearings often produce more heat than light, but amongst the wearisome adversarial exchanges was some useful information.

Tuesday, 16 December 2014

FT and the Economic Regulator


The Government’s willingness to breach the spirit of national competition policy by its use of State resources to prop up Forestry Tasmania whilst imposing austerity on broader sections of the Tasmanian community has struck a discordant note with many of the affected.

If prices charged by Forestry Tasmania were required to fully cover costs then it would be required to cease its unprofitable native forest harvesting.

A willingness by the affected to pursue remedies and solutions has precipitated this note.

Competitive neutrality complaints are handled by the Office of the Tasmanian Economic Regulator (OTTER) pursuant to the Economic Regulator Act 2009 .

Saturday, 6 December 2014

A breach of competition policy?


The Forestry Tasmania scrutiny hearing left no doubt that its survival depends on selling more native forest woodchips at higher prices.

Filling the void left by Gunns’ departure and venturing into the space currently occupied by private woodchippers and exporters is not without public policy problems, notably a need to adhere to national competition principles.

Getting government funds into Forestry Tasmania is more than simply a question of a choice between deficit funding and equity transfers.

The principle of competitive neutrality applies to government businesses competing with the private sector, and ensures that any advantage arising solely from their government ownership be removed unless it’s in the public interest, and prices need to be set as if they were privately owned and are fully cost reflective.

Sunday, 30 November 2014

FT: Will it make a profit?


“Will it make a profit?”

“Indeed it will....“was the unequivocal reply.

FT’s District Forester was in no doubt when answering  an ABC reporter's question about the proposed clear felling of a 68 hectare coupe of 60 year old native forest regrowth at Lapoinya in North West Tasmania. The full ABC report can be found HERE.

After a few years of losing $20 for each tonne of timber chopped down and sold has FT found a way to make a profit?

Thursday, 13 November 2014

Why Bob Gordon had to go?


The seemingly pointless inquiry investigating the sale of the Triabunna mill to Graeme Wood and Jan Cameron in July 2011 rather than to Ron O’Connor and the Aprin Group has brought to light a lot of correspondence and emails , now all accessible on the inquiry website .

Not much we didn’t already know.

One exception was a letter (reproduced below) from Treasury Secretary Martin Wallace to the Department of Economic Development Secretary Mark Kelleher dated 16th June 2011 which revealed a little more detail on the failed Aprin deal and maybe why Bob Gordon's retirement occured a little earlier than otherwise planned.

Sunday, 2 November 2014

Forestry Tasmania: Nothing has changed


The first thing that strikes when leafing through Forestry Tasmania’s (FT’s) Annual Report for 2013/14 is that the Directors have hardened their view that profits in the foreseeable future are unlikely.

Thursday, 16 October 2014

Australia’s addiction to private debt


Macrobusiness.com have just posted a crackerjack article on the misreading of the Australian government budget emergency  and the errant path they have elected to follow.
 
"A perennial and divisive issue in politics and economics today is the matter of public debt. It is commonly asserted that rising public debt threatens the economy and needs to be reined in. Governments are often portrayed as ‘irrational’ actors when they incur a fiscal deficit, causing unnecessary inflation and interest rates to rise by borrowing to meet the shortfall.

Private sector lending is supposedly ‘crowded out’ by lifting the cost of money and limiting access to a finite lending pool by government actors. A large stock of public debt and chronic deficits are considered economically harmful, due to increasing the interest payment burden on taxpayers. A centrepiece of the Abbott government’s economic policy platform is its strident warnings about growing public debt: Australia’s ‘budget emergency’.

This specious claim remains unchallenged, for commentators are generally unfamiliar with the long-term trends in debt and its composition. This analysis fills that void by examining the long-term trends in public, private and external debt. Unsurprisingly, the conclusions arrived at are diametrically opposed and differ sharply to those stemming from the established political and economic narrative."