tag:blogger.com,1999:blog-43141126859943999202024-03-28T07:44:29.290+11:00TasfintalkIn depth comment and analysis on Tasmanian finance and economics issuestasfintalkhttp://www.blogger.com/profile/04012719835733649162noreply@blogger.comBlogger355125tag:blogger.com,1999:blog-4314112685994399920.post-18961371173105266902024-03-24T20:29:00.005+11:002024-03-25T08:09:04.864+11:00Tasmania's debt: Should we worry?<p> </p><p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">Viewing problems facing State
governments through the same lens used to look at Federal budgets run the very
real risk of erroneous conclusions.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">The Australia Institute wrote an opinion
piece titled </span><i><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 18.0pt; mso-ligatures: none;"><a href="https://australiainstitute.org.au/post/tasmanias-fear-of-government-debt-is-hurting-the-state/">Tasmania's fear of Government debt is hurting the State</a></span></i><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 18.0pt; mso-ligatures: none;"> published in The Mercury on 22<sup>nd</sup> March reassuring Tasmanians
that deficit spending was fine because our assets are growing. “</span><i><span style="font-size: 14pt; line-height: 150%;">That does not sound like a government
about to go broke</span></i><span style="font-size: 14pt; line-height: 150%;">“, it
was said, ignoring the fact <span style="mso-spacerun: yes;"> </span>insolvency
isn’t triggered by a lack of assets, rather an inability to service liabilities.
<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">There followed an assertion because our
per capita net debt was lower than other States, despite other financial
liabilities such as the much larger unfunded defined benefit scheme for
government employees, Tasmania was sitting pretty. Our biggest challenge is to unshackle
ourselves from a restrictive self-imposed borrowing constraint. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">The pro-forma response to the Tony Abbott-Joe
Hockey debt and deficit doomsday scenario was trotted out. Most economists agree
with this knowing the Australian government is not revenue constrained and more
significantly, controls its own currency, neither of which are true in the case
of state governments.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">The weeties choking moment came when
it was stated: <i>“Tasmania currently is able to meet its spending commitment
to pay teachers, nurses and other public sector workers. <a name="_Hlk162182016">The
“cash flow” of the government is actually in surplus “.<o:p></o:p></a></i></span></p>
<span style="mso-bookmark: _Hlk162182016;"></span>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">That statement shows a complete
misunderstanding of Tasmanian government financials. The suggestion that operating
revenue is enough to cover operating spending is simply wrong.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">This blog will pinpoint the errors
whilst also having a look at the way State governments report their budget
outcomes compared to the way the Federal government does.<span></span></span></p><a name='more'></a> <o:p></o:p><p></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">State governments use their Income Statement.
In the past Tasmanian governments have used the Net Operating Balance from the
Income Statement as a measure of a budget’s outcome. But it was a misleading
measure because it didn’t account for the all-important capex outlays, a
crucial part of State governments’ activities, far more so than is the case
with the Federal government. Finally, after years of using a narrowly defined
figure to hoodwink Tasmanians, readers of financial statements have started to cast
their eyes further down the Income Statement to a measure termed the Fiscal Balance
which is a measure of a budget outcome including operating and capex spending. The
Income Statement is prepared on an accruals basis, what is earned rather than
received and what is incurred rather than paid. The Fiscal Balance is an
accruals measure.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">The Federal government’s budget
outcome each year is from the Cash Flow Statement. When the Federal government
talks about a surplus or a deficit it uses a figure called the Underlying Cash Balance
from the Cash Flow Statement. This includes operating and capex spending (labelled
in government accounts as non-financial assets). <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">There’s a further figure termed the Headline
Cash Balance which includes transfers into government businesses (eg the NBN) and
into other statutory funds which governments increasingly appear to think is
the hallmark of prudent budget management.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">Apart from the inevitable timing differences
between accruals and cash measures, as a rule the Fiscal Balance (an accrual
measure) is similar to the Underlying Cash Balance (a cash measure).<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">To assert “<i>the ‘cash flow’ of the
government is actually in surplus “suggests</i> the Australia Institute is
referring to the government’s Cash Flow Statement. So, let’s look at the latest
from the Revised Estimates Report (RER) for 2023/24 issued in February 2024.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;"><o:p> </o:p></span></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgloIMtn76xrnXlLZ_Sg2-1U8b3ZEGyLkOUnxvD818K-QiB1AaClOqsLR9SYBl-0_HxIj8nDPjmOk9RtePBXaVcumKW0owzkFRC9hX6Tj_z9-fLoKbsjIw88JO1rQaBbDSER7hNR4PFEILS93v_SfBecxujeD6za2HqJSytTgSlZSx6VNgG7bclZ7fTyG6D/s777/rercfs1.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="777" data-original-width="640" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgloIMtn76xrnXlLZ_Sg2-1U8b3ZEGyLkOUnxvD818K-QiB1AaClOqsLR9SYBl-0_HxIj8nDPjmOk9RtePBXaVcumKW0owzkFRC9hX6Tj_z9-fLoKbsjIw88JO1rQaBbDSER7hNR4PFEILS93v_SfBecxujeD6za2HqJSytTgSlZSx6VNgG7bclZ7fTyG6D/w528-h640/rercfs1.png" width="528" /></a></div><br /><p></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">Cast you eye halfway down the Table
and you’ll find a figure representing net cash flows from operating activities.
It is positive in all years which suggests there’s enough revenue to cover
operating spending. But it’s a bogus operating figure for the following
reasons:<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpFirst" style="line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l1 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: Aptos; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">1.<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 150%;">Although
described under the label cash received from operating activities, grants
include capital grants. These are listed on page 28 of the RER and vary from $500
million in 23/24 to $391 million in 26/27. <o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l1 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: Aptos; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">2.<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 150%;">Dividends
tax and rate equivalent payment are the returns from government businesses.
They include the drawdown of a special fund known as the Mersey Hospital money at
the rate of approximately $100 million pa except in 26/27 when the bucket runs
dry. The funds were lodged with the State-owned finance company, Tascorp and are
drawn down and paid as a dividend each year. As a consequence, it gets picked
up as an operating receipt. Structuring drawdowns of special funds as dividends
has been used on other occasions by Tasmanian governments to boost a budget ‘operating’
figure. When TTLine was given a dividend holiday so it could save for two new
ferries, from time to time the government requested a dividend be paid which
was then returned as an equity contribution. The round robin transaction had the
welcome effect of increasing operating cash flows. The return of capital was not
an operating expense and didn’t affect the bottom line when repatriated. It was
an accounting trick to put lipstick on a pig. <o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l1 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: Aptos; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">3.<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 150%;">Cash
payment for superannuation ($717 million in 23/24) include pension and lump sum
payment for retired members of the government defined benefits (DB) scheme
($352 million in 23/24). Governments for the last 30 years have chosen not to
set aside any amounts for current DB employees not even the mandatory super guarantee
levy (SGL) amounts presently 10.5% of salary. Governments have chosen to spend
the cash rather than borrow and to pay benefits on an emerging cost basis when
they eventually fall due. Hence, for all intents and purposes outlays to meet
DB super commitments are not operating outlays, rather they are debt servicing
costs.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpLast" style="line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l1 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: Aptos; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">4.<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 150%;">As
per 3 above superannuation payments do not include the SGL portion for current
DB employees. In 23/24 this is estimated to be $60 million. Hence the operating
cash figure needs to be taken with a grain of salt if used as a measure of budget
wellness.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">Let’s now proceed to<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpFirst" style="line-height: 150%; margin-bottom: 0cm; margin-left: 39.0pt; margin-right: 0cm; margin-top: 0cm; margin: 0cm 0cm 0cm 39pt; mso-add-space: auto; mso-list: l0 level1 lfo2; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 150%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 150%;">adjust
operating revenue by reallocating capital grants so they net off against capex
spending. <o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: 150%; margin-bottom: 0cm; margin-left: 39.0pt; margin-right: 0cm; margin-top: 0cm; margin: 0cm 0cm 0cm 39pt; mso-add-space: auto; mso-list: l0 level1 lfo2; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 150%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 150%;">Remove
the draw down of the Mersey money as it overstates operating cash revenues (NB
it exhausts in 3 years’ time.) <span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p>
<p class="MsoListParagraphCxSpLast" style="line-height: 150%; margin-bottom: 0cm; margin-left: 39.0pt; margin-right: 0cm; margin-top: 0cm; margin: 0cm 0cm 0cm 39pt; mso-add-space: auto; mso-list: l0 level1 lfo2; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 150%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 150%;">Rearrange
interest/borrowing costs and DB super outlays as debt servicing costs to emphasise
the current precarious budgetary position.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">Presenting the cash flow statement in
a similar format to the Federal budget with an underlying cash position and a headline
cash position might help readers understand Tasmania’s predicament.<o:p></o:p></span></p><p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;"></span></p><p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">[NB Some of the capital grants may become
equity contributions into government businesses, Tas Irrigation for example,
before being spent for their intended purpose. To that extent the underlying cash
balance may be overstated. The headline cash balance remains unaffected.]<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;"><o:p> </o:p></span></p>
<table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; mso-padding-alt: 0cm 5.4pt 0cm 5.4pt; mso-yfti-tbllook: 1184; width: 659px;">
<tbody><tr style="height: 15.75pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
<td colspan="5" nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 494.05pt;" valign="bottom" width="659">
<p align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">CASH FLOW STATEMENT $ million<o:p></o:p></span></b></p>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 1;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 284.05pt;" valign="bottom" width="379"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">2023/24<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">2024/25<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">2025/26<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">2026/27<o:p></o:p></span></b></p>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 2;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 284.05pt;" valign="bottom" width="379">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">Operating
receipts<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">8,190.1 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">8,306.6 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">8,470.9 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">8,725.7 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 3;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 284.05pt;" valign="bottom" width="379">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">Operating
payments excl debt servicing<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-8,251.0
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-8,173.2
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-7,968.7
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-8,097.5
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 4;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 284.05pt;" valign="bottom" width="379"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70"></td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 5;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 284.05pt;" valign="bottom" width="379">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">Cash
operating balance before debt servicing<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-60.9
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">133.4 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">502.2 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">628.2 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 6;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 284.05pt;" valign="bottom" width="379"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70"></td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 7;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 284.05pt;" valign="bottom" width="379">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">Less debt
servicing<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70"></td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 8;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 284.05pt;" valign="bottom" width="379">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 12pt;"><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">DB super payments<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-352.0
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-371.1
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-380.4
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-393.0
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 9;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 284.05pt;" valign="bottom" width="379">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 12pt;"><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">Interest<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-127.9
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-204.2
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-259.6
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-302.5
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 10;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 284.05pt;" valign="bottom" width="379">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">Total
debt servicing<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-479.9
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-575.3
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-640.0
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-695.5
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 11;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 284.05pt;" valign="bottom" width="379"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70"></td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 12;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 284.05pt;" valign="bottom" width="379">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">Operating
cash after debt servicing <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-540.8
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-441.9
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-137.8
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-67.3
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 13;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 284.05pt;" valign="bottom" width="379"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70"></td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 14;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 284.05pt;" valign="bottom" width="379">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">Less
purchases non-financial assets (net)<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-590.6
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-623.5
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-738.3
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-596.5
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 15;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 284.05pt;" valign="bottom" width="379"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70"></td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 16;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 284.05pt;" valign="bottom" width="379">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">Underlying
cash balance<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-1,131.4
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-1,065.4
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-876.1
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-663.8
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 17;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 284.05pt;" valign="bottom" width="379"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70"></td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 18;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 284.05pt;" valign="bottom" width="379">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">Less net
cash outflows financial assets(policy)<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-317.3
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-227.4
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-116.0
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-62.2
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 19;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 284.05pt;" valign="bottom" width="379"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70"></td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 20; mso-yfti-lastrow: yes;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 284.05pt;" valign="bottom" width="379">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">Headline
cash balance <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-1,448.7
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-1,292.8
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-992.1
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 52.5pt;" valign="bottom" width="70">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;">-726.0
</span><span style="color: black; mso-ascii-font-family: Aptos; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Aptos; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
</tr>
</tbody></table>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 115%;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="line-height: 150%;"><span style="font-size: 14pt; line-height: 150%;">By way of comparison estimated Federal government receipts
for 23/24 total $685 billion. The underlying cash deficit is only $1.1 billion.
In the above Table Tasmania’s underlying cash deficit for 23/24 is $1.1
billion<span style="mso-spacerun: yes;"> </span>on receipts of $8.2 billion. <span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">Just to service Tasmania’s debt
requires borrowings. Paying for capex (non-financial assets) not covered by
capex grants requires more borrowings. Equity contributions into government
businesses (financial assets for policy purposes) requires even more borrowing.
Government businesses are borrowing at the same rate as the government to service
aging assets in companies that have been used as ATMs by governments, thereby
constraining those companies from continuing with existing high levels of
returns to government as their debt will have to repaid. There’s no plan to raise
extra revenue. Real operating outlays are falling whilst demand is increasing. There
are no feasible future scenarios where extra borrowings won’t be needed. If in
doubt read Treasury’s Fiscal Sustainability Reports. Growing assets is the easy
bit. Servicing the liabilities used to acquire the assets is the challenge. We
haven’t even started looking for the $300 million of budget savings already embedded
in the budget, or how to fund the $1.7 billion of election promises by the
Liberals assuming they form a government, or the programs not included in
forward estimates because deals with grant recipients weren’t finalised, not to
mention the stadium deal or UTAS which is looking increasingly likely to
require a bail out.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">To suggest Tasmanians stop worrying
is the dumbest thing I’ve ever read from the Australia Institute with whom I usually
find myself in agreement.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">It’s going to be a long hard road forward
when there’s such widespread misunderstanding of the fiscal position of states
like Tasmania. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-left: 21pt;"><br /></p>tasfintalkhttp://www.blogger.com/profile/04012719835733649162noreply@blogger.com1tag:blogger.com,1999:blog-4314112685994399920.post-72476005812704268022024-03-13T17:02:00.021+11:002024-03-14T08:15:25.238+11:00Election 2024: Tas vs Vic - the battle for the Basket<p> </p><p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">Our less than honest politicians continue
to rely on an endemic misunderstanding of State government debt when spruiking
their credentials as economic managers.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">Rebecca White harks back to 2014 when
general government net debt was absent. But there was plenty of unfunded
superannuation liabilities and borrowings by government businesses, some of which were needed to pay returns to government,</span><span face="Aptos, sans-serif" style="font-size: 14pt;"> </span><span style="font-size: 14pt;">that she conveniently
sidestepped.</span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">Jeremy Rockliff’s advertisements have
a fleeting glimpse of a chart showing net debt across states with Tasmania
having a small amount compared to other States. A disingenuous comparison given
we’re the smallest State.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">Treasurer Ferguson when defending the
level of debt in his 2023/24 Budget the day after the budget was handed down in
May 2023 told us </span><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: Aptos; mso-bidi-theme-font: minor-latin;">our net debt is
quite low:<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: Aptos; mso-bidi-theme-font: minor-latin;"><span style="mso-spacerun: yes;"> </span>“…<i><span style="color: black;">our borrowings are very, very small in comparison to other
jurisdictions per capita, just have a look across the waters that Victoria what
they are doing……..I wouldn’t want to be in their shoes.”</span></i><o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">There’s plenty of metrics to suggest
our predicament is not much different to Victoria, perhaps even worse given we
are still deluding ourselves about our true position, and about to be lumbered
with another round of unfunded election promises no matter who wins.<span></span></span></p><a name='more'></a><o:p></o:p><p></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">It’s more than reasonable if
comparisons are to be made to include not just borrowings but unfunded liabilities
of defined benefit schemes which have been left unfunded with all parties using
the cash savings for other purposes to fund government rather than undertake more
borrowings.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">Using per capita measures is one way
of making comparisons across States. Another fairer measure would be to compare
the debt requiring servicing with the size, in economic terms of each State.
Gross State Product measures what states produce and gives an indication of the
capacity of a state to service debt.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">Most discussion focusses on general
governments which operate departments and agencies to deliver services. But all
government to varying degrees own and operate businesses. All states differ. Tasmania’s
principal publicly owned businesses are the electricity companies. In Victoria it’s
the water companies. Some government activities are flicked off into wholly
owned businesses in one State but not in another, sometimes for management
reasons, sometimes possibility to escape scrutiny. One thing all States have in
common is that government businesses deliver services and the debts of the
businesses are guaranteed by government. And, as noted above governments have used government businesses as ATMs to fund their operations, hence measure of debt which include government businesses are appropriate.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">Thus it is eminently reasonable when
looking at comparisons across States we look at government businesses as well
as general government. Government accounting conventions require States to issue
financial accounts for the Public Non-Financial (PNF) sector, so it is not too
hard to do interstate comparisons. They are most revealing.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">If we look at net debt in the PNF sector
as a % of gross state product, Tasmania has comparatively less debt than Victoria.
But the gap is narrowing if we look at figures from the latest budget update
for both States.</span></p><p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhqBDKNLYw_KOTko4FKjxtKa0vLZ5CKYCj9_sFUqqtfPeUB5Ie2nZ6fSftgeH4JgpmpqckGcD_QZIeWB0foCXNCBqh7b3JRkhOjroBWabwgYD-QpccPxqECUYNDL5-ghaxdaJp54ZvKh47g89hfV9diB1-GMAy9qEUsfkWzMf2EuV4dX-Pyt8cqORw10KrY/s752/victas1.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="452" data-original-width="752" height="384" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhqBDKNLYw_KOTko4FKjxtKa0vLZ5CKYCj9_sFUqqtfPeUB5Ie2nZ6fSftgeH4JgpmpqckGcD_QZIeWB0foCXNCBqh7b3JRkhOjroBWabwgYD-QpccPxqECUYNDL5-ghaxdaJp54ZvKh47g89hfV9diB1-GMAy9qEUsfkWzMf2EuV4dX-Pyt8cqORw10KrY/w640-h384/victas1.png" width="640" /></a></div><br /><div class="separator" style="clear: both; text-align: center;"><br /></div><p></p><div class="separator" style="clear: both; text-align: center;"><br /></div><br /><p></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">Victorians get reminded every day
they are a ‘basket’ case. But we aren’t much different.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">In fact things are worse when one
looks at debt plus unfunded defined benefit liabilities as a % of gross state
product. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;"><o:p> <span> </span><span> </span></o:p></span><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhotVKgfyPc7jc2EOk0zNgBLYG7s7Dv__RsCa2_CqRbYRyI9yGeR9ppdT03VlmPU83WG7FkOLgVF4YnH6evCkXhnLeD5WD1mRKLBXhEK_8urYI5-5RMKaSpjhHczRiOgXag7G1BDj2iaISidHVrLfuN1w7M1t9FOfLkA7TFY-8yvXRpc4rFUijiRixrqVsw/s752/victas2.png" style="margin-left: 1em; margin-right: 1em; text-align: center;"><img border="0" data-original-height="452" data-original-width="752" height="384" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhotVKgfyPc7jc2EOk0zNgBLYG7s7Dv__RsCa2_CqRbYRyI9yGeR9ppdT03VlmPU83WG7FkOLgVF4YnH6evCkXhnLeD5WD1mRKLBXhEK_8urYI5-5RMKaSpjhHczRiOgXag7G1BDj2iaISidHVrLfuN1w7M1t9FOfLkA7TFY-8yvXRpc4rFUijiRixrqVsw/w640-h384/victas2.png" width="640" /></a></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">Tasmania has higher debts requiring servicing
than Victoria relative to the size of our economy. We are a clear leader and
the gap is widening. <span style="mso-spacerun: yes;"> </span>It’s likely to
widen further after this election.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">The Liberal’s 2030 Strong Plan for
the Future is a cruel hoax on Tasmanians who deserve better. Labor’s fiscal
strategy is an absolute disgrace. It doesn’t even deserve a terminating pass at
the remedial level. The Greens have yet to have any of their policies costed
and are yet to issue a fiscal statement and the JLN don’t feel a need to burden
us with any policy detail.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">How will this nightmare end?<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;"><o:p> </o:p></span></p>tasfintalkhttp://www.blogger.com/profile/04012719835733649162noreply@blogger.com0tag:blogger.com,1999:blog-4314112685994399920.post-29259408527258254422024-03-12T08:13:00.013+11:002024-03-16T07:48:54.945+11:00Election 2024: The Labor Fiscal strategy<p> </p><p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; mso-collapsed-heading: yes; mso-outline-level: 2;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-color-alt: windowtext;">Just when one thinks
things can’t get any worse the Tasmanian Labor Party put out its <a href="2024 Fiscal Strategy Statement - Tasmanian Labor Party.pdf (treasury.tas.gov.au)" target="_blank">Fiscal Strategy Statement</a> with an accompanying <a href="https://www.taslabor.org.au/news/media-releases/yet-another-ferguson-fail/" target="_blank">media release</a> declaring Treasurer
Ferguson “<i>simply has no idea what he’s doing</i>.”</span><span style="font-size: 14pt; line-height: 150%;"><o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; mso-outline-level: 2;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-color-alt: windowtext;">It’s a classic case of a kettle being called black by a
particularly sooty pot.</span><span style="font-size: 14pt; line-height: 150%;"><o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; mso-outline-level: 2;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-color-alt: windowtext;">The Fiscal Strategy is a statutory requirement of the
Charter of Budget Responsibility Act 2007. Opposition parties need to lodge a
Strategy with the Treasury Secretary ten days after an election is called.</span><span style="font-size: 14pt; line-height: 150%;"><o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; mso-outline-level: 2;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-color-alt: windowtext;">The Tasmanian Labor Party outsourced the preparation
of its fiscal strategy to its media minders. As a consequence, the strategy is
a flawed document replete with dubious and at times incorrect assertions.<span></span></span></p><a name='more'></a><span style="font-size: 14pt; line-height: 150%;"><o:p></o:p></span><p></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; mso-outline-level: 2;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-color-alt: windowtext;">In short Labor maintains:</span><span style="font-size: 14pt; line-height: 150%;"><o:p></o:p></span></p>
<p class="MsoListParagraphCxSpFirst" style="background: white; line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l1 level1 lfo1; mso-outline-level: 2; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 150%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="color: black; font-size: 14pt; line-height: 150%; mso-color-alt: windowtext;">the ballooning deficits are principally
caused by wasteful spending rather than any other structural problems. </span><span style="font-size: 14pt; line-height: 150%;"><o:p></o:p></span></p>
<p class="MsoListParagraphCxSpLast" style="background: white; line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l1 level1 lfo1; mso-outline-level: 2; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 150%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="color: black; font-size: 14pt; line-height: 150%; mso-color-alt: windowtext;">the Liberals record debt is largely due
to Treasurer Ferguson’s “<i>inability to manage infrastructure projects on
budget</i>.”</span><span style="font-size: 14pt; line-height: 150%;"><o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; mso-outline-level: 2;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-color-alt: windowtext;">Both claims disregard a few salient facts.</span><span style="font-size: 14pt; line-height: 150%;"><o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; mso-outline-level: 2;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-color-alt: windowtext;">First let’s have a closer look at what Labor accepts
as a deficit calculation. A chart showing Liberals’ deficit confirm it uses the
net operating balance (NOB) measure for deficits which knowingly understates
the cash deficits required to run a State government. </span><span style="font-size: 14pt; line-height: 150%;"><o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; mso-outline-level: 2;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-color-alt: windowtext;">Labor is vowing to return the NOB to a slim surplus
by 2026/27. It has identified spending on consultants, advertising and travel
and reckons it can trim these by $50 million pa with a view to saving “<i>hundreds
of millions of dollars over the medium term</i>”. Even if that were true and
lots of other wasteful areas could also be identified and acted upon, enough to
bring the NOB into surplus, Labor doesn’t seem to grasp the basic reality there
will still be <span style="mso-spacerun: yes;"> </span>ballooning cash deficits. The
reasons for this are fourfold:</span><span style="font-size: 14pt; line-height: 150%;"><o:p></o:p></span></p>
<p class="MsoListParagraphCxSpFirst" style="background: white; line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l0 level1 lfo2; mso-outline-level: 2; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: Aptos; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">1.<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="color: black; font-size: 14pt; line-height: 150%; mso-color-alt: windowtext;">The NOB as a profit figure includes a
figure for depreciation expense. But the rate of spend on new capex must be
more than the rate of depreciation on existing capital, infrastructure etc else
we go backwards, particularly if our population continues to increase. Even when
the Libs were deferring capex for as long as possible this was achieved – capex
spending exceeded depreciation. The takeaway is : <span style="mso-spacerun: yes;"> </span><b>NOB understates the cash effect of
infrastructure spending</b>.</span><span style="font-size: 14pt; line-height: 150%;"><o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="background: white; line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l0 level1 lfo2; mso-outline-level: 2; text-indent: -18pt;"><!--[if !supportLists]--><b><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: Aptos; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">2.<span style="font: 7pt "Times New Roman";">
</span></span></span></b><!--[endif]--><span style="color: black; font-size: 14pt; line-height: 150%; mso-color-alt: windowtext;">Although purportedly a profit figure
NOB includes capex grants from the Feds. Some of these grants are to be spent by
the general government (road grants say), some are directed via equity contributions
into government businesses (Tas Rail, Tas Irrigation etc) Either way when spent
they are not included in the NOB figure. The takeaway is <b>: NOB overstates
the cash effect of capital receipts.</b></span><b><span style="font-size: 14pt; line-height: 150%;"><o:p></o:p></span></b></p>
<p class="MsoListParagraphCxSpMiddle" style="background: white; line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l0 level1 lfo2; mso-outline-level: 2; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: Aptos; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">3.<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="color: black; font-size: 14pt; line-height: 150%; mso-color-alt: windowtext;">The NOB does not include other equity contributions
required by government businesses. NB <b>NOB ignore the cash effects of topping
up government businesses.</b></span><span style="font-size: 14pt; line-height: 150%;"><o:p></o:p></span></p>
<p class="MsoListParagraphCxSpLast" style="background: white; line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l0 level1 lfo2; mso-outline-level: 2; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: Aptos; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">4.<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="color: black; font-size: 14pt; line-height: 150%; mso-color-alt: windowtext;">The NOB does not include the full cash effects
of paying defined benefits superannuation. This will have an increasing cash
effect over the next 10 years compared with the NOB effect as most members will
retire and peak outlays will reach $500 million in the early 2030s. NB <b>NOB understates
the cash effect of funding defined benefit superannuation</b>.</span><span style="font-size: 14pt; line-height: 150%;"><o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; mso-outline-level: 2;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-color-alt: windowtext;">So even if Labor manages to engineer a small NOB
surplus by 2026/27 (which is impossible for reasons presented below) there will
still be a huge cash deficit. To understand this dichotomy the 2023/24
estimated outcomes as per the latest Revised Estimates Report show the NOB at $521
million deficit but the cash deficit will be $1,352 million. That’s a difference
of $831 million. <span style="mso-spacerun: yes;"> </span>How’s Labor going to
turn that around? It talks about stabilising the debt position but then completely
overlooks how it will fund cash needs over and above those included in the
narrow NOB figure.</span><span style="font-size: 14pt; line-height: 150%;"><o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; mso-outline-level: 2;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-color-alt: windowtext;">If Labor is having trouble identifying cash deficits from
government accounts, look no further than the net debt calculations. <b>The movement
in net debt each year is a good proxy for the cash deficits each year. </b></span><span style="font-size: 14pt; line-height: 150%;"><o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; mso-outline-level: 2;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-color-alt: windowtext;">Labor says the debt we now have can be easily
explained as follows:</span><span style="font-size: 14pt; line-height: 150%;"><o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; mso-outline-level: 2;"><span style="color: black; mso-color-alt: windowtext;">”</span><i><span style="color: black; font-size: 14pt; line-height: 150%; mso-color-alt: windowtext;">A
big part of the problem is Michael Ferguson’s inability to manage
infrastructure projects on budget.”</span></i><i><span style="font-size: 14pt; line-height: 150%;"><o:p></o:p></span></i></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; mso-outline-level: 2;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-color-alt: windowtext;">It’s true that a universal feature of State budgets
over the last 10 years is that year after year actual capex spending has been
less than budgeted amounts. <span style="mso-spacerun: yes;"> </span>But that
means debt <b>is lower</b>. To think that getting projects out the door on time
will lead to lower debt show a fundamental misunderstanding of basic
accounting. </span><span style="font-size: 14pt; line-height: 150%;"><o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; mso-outline-level: 2;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-color-alt: windowtext;">One of the reasons for deferring capex spending is because
of cash constraints. It was the easiest way to conserve cash.</span><span style="font-size: 14pt; line-height: 150%;"><o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; mso-outline-level: 2;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-color-alt: windowtext;">The other way of conserving cash was by not setting
aside anything for defined superannuation benefit members, not even the mandatory
super guarantee levy amount currently 10.5 per cent of salary. Since 2014 the
Liberal have conserved $1.2 billion that way. Labor did the same prior to 2014.
It never funded current employees. Both parties adopted the emerging cost
method, paying the amounts when due, either as a lump sum or pension upon retirement
or cessation of fund membership. The chickens are now flocking home to roost and
the effect is that more cash needs to be found for defined benefit super
amounts which are now included in debt servicing costs.</span><span style="font-size: 14pt; line-height: 150%;"><o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; mso-outline-level: 2;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-color-alt: windowtext;">None of the claims and solutions Labor proposes with
its Fiscal Strategy have much validity. Debt servicing costs are taking an
increasing share of government revenue. Once you exclude them, spending on
operations such as wages and other costs of delivering services, in real terms,
are projected to fall.</span><span style="font-size: 14pt; line-height: 150%;"><o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">The promises from the last 2
elections in 2018 and 2021 both added $1.4 billion to budget spending. Then
there’s $300m of budget efficiency dividends yet to be found, plus lots of
other outlays yet to be quantified according to the Pre-Election Financial
Outlook PEFO Report.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">If we spend more, debt servicing
costs will go up further leaving even less to spend on operations. Treasury has
made it clear any growth won’t raise enough revenue to offset the increased
debt servicing costs. Diverting funds from one project to another won’t make
any difference.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">Pretending there’s millions in Hydro
that can be raided to prop up the government is delusional. The government gets
most of the profits each year as it is, leaving Hydro with insufficient funds
to look after its aging assets.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">And there aren’t any pots of gold in
other government businesses either. The net debt of the general government is estimated
to reach $6.1 billion as Labor points out. The net debt of government
businesses is as much again. This will make it harder for those businesses to
keep paying returns to government. They have debts that need servicing. Debt
servicing must include loan reduction otherwise the businesses will be left
with aging assets with debt still owing.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">Most governments get away without reducing
the level of debt. Which may be fine for State governments if they can pay the
interest each year hopefully by capturing a little more revenue from the
expanded capital structure.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">But Tasmania can’t. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">Tasmania has reached the tipping point.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">Labor deludes itself when it says, <i>“ten
years ago Tasmania’s fiscal position was the envy of the nation”.</i> That’s
simply not the case. While net debt was low our unfunded super liabilities were
very high compared to other states on a proportionate basis. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">Tasmania’s problems are not the fault
of one party. They are Tasmanian problems to which we collectively have
repeatedly turned a blind eye.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">The Labor Fiscal strategy offers no
hope.<o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; mso-outline-level: 2;"><span style="font-size: 14pt; line-height: 150%;"><o:p> </o:p></span></p>tasfintalkhttp://www.blogger.com/profile/04012719835733649162noreply@blogger.com0tag:blogger.com,1999:blog-4314112685994399920.post-20765798598916239412024-02-27T10:13:00.003+11:002024-02-27T10:13:17.505+11:00Election 2024: End of the UTAS dream?<p> </p><p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%;">Reading between the lines of the Liberals’
statement vowing to block the sale of UTAS’ Sandy Bay properties, one gets the
feeling it’s a PR masterstroke from UTAS. They’ll now be able to say they were
forced to change course rather than having to admit it was a crock of an idea in
the first place.<span></span></span></p><a name='more'></a><o:p></o:p><p></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%;">The Liberal’s statement about the striking
“the right balance between protecting the public interest and allowing the
University to get on with their business”, is a classic way of getting everyone
off the hook. The Libs can say they listen to voters and UTAS can say they were
forced to abandon the dream that was going to reform Tasmania, without having
to reveal how it had become a nightmare.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%;">To further state UTAS should be
allowed to get on with their business is simply mealy mouthed nonsense when
they know full well that will mean UTAS knocking on the government’s door for
approval to borrow more to get out of the deep dark hole it has dug for itself.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%;">The question for the Libs now becomes,
to what extent will they rein in UTAS’ excesses and make it more accountable as
a condition of more borrowings?<o:p></o:p></span></p>tasfintalkhttp://www.blogger.com/profile/04012719835733649162noreply@blogger.com0tag:blogger.com,1999:blog-4314112685994399920.post-1055622360457268542024-02-25T16:34:00.027+11:002024-02-26T09:16:41.866+11:00Election 2024: UTAS issues<p> </p><p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">The Clark electorate in Hobart is
particularly crucial. If major parties only manage to get two seats each at the
State election on March 23rd they will need four seats in the other four
electorate to achieve a majority in the new parliament. That’ll be a tough ask.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">Given the poll 18 months ago revealing
three quarters of Hobart City electors are opposed to UTAS’ move into the City
it is a little surprising there hasn’t been a greater willingness by third
parties and potentially key independents vying for the three remaining seats to
discuss their views with voters.<span></span></span></p><a name='more'></a><o:p></o:p><p></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">Discussion is made more difficult because
UTAS doesn’t provide much information. <span style="mso-spacerun: yes;"> </span>Glossy
photo ops are preferred. Anything up to six months can pass after year end before
UTAS needs to lodge financials with ACNC, the Australian Charities and Not-for-profits
Commission. In the past we have waited even longer to see a copy of the full
Annual Report.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">UTAS’ 2023 year finished on 31<sup>st</sup>
December 2023. The upcoming March 1<sup>st</sup> meeting of University Council is
expected to sign off on 2023 financials. They will have been audited by now.
Whilst UTAS is required by its governing act to furnish Education Minister
Jaensch with a copy which usually sits in his in-tray for as long as possible
before the statutory period for tabling in Parliament elapses, there is nothing
to stop UTAS from releasing its 2023 results publicly when it wishes. It’s a
public institution and the next four weeks of election discussions would be a good
time for voters to get their heads around the multitude of problems facing the
State. Our many problems are inter-related as Hobart residents well know –
traffic, housing, the UTAS move. They’re all connected.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">Much of what we know about UTAS’ move
to the City has been provided reluctantly often due to the dogged perseverance
of UTAS’ arch nemesis Robert Hogan.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: justify;"><span style="font-size: 14pt; line-height: 150%;">The commitment to issue
minutes of Council minutes once approved as being true and correct records of proceeding
has become a farce. Nothing of substance is revealed now they know some people read
them - who turned up, who wandered in and out of the meeting and maybe a <span style="mso-spacerun: yes;"> </span>final decision, but only if the decision was
made at the meeting rather than being flicked off elsewhere for finality out of
the public gaze. No discussion about issues or challenges facing UTAS. The
recent second day of the all-important October 2023 meeting of Council where strategies
for the upcoming 2024 year were supposedly discussed wasn’t even a formal
meeting. No agenda means no minutes. It was probably run by a facilitator, rather
than a formal meeting with a chairman requiring minutes. For a public
institution it’s the sort of opacity one would hope third parties and
independents would want to address.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: justify;"><span style="font-size: 14pt; line-height: 150%;">Universities have been
forced by funding decisions of successive Federal governments to become more
sustainable by attracting more international students to help boost revenue and
fund research. In the process universities have become a front for a Big Australia,
with powerful backers like the property lobby and the Harvey Normans of the
world. Universities have become promoters of an edu-migration Ponzi scheme, a
model that depends on a constant stream of new international students.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: justify;"><span style="font-size: 14pt; line-height: 150%;">But like all Ponzi
schemes, what happens when inflows subside? And when people realise the
spill over costs are much larger than anyone imagined. And much larger than the
supposed benefits. That’s when the best laid plans of mice and men tend to go
astray. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: justify;"><span style="font-size: 14pt; line-height: 150%;">Like all Ponzi schemes
the first flush of cash brings out the worst in people. Making 30 years plans based
on a few aberrative years was always going to be a mistake.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: justify;"><span style="font-size: 14pt; line-height: 150%;">Universities have had a
long history of conservative balance sheets with lots of assets and not much
debt. ‘Lazy balance sheets’ was a common description from consultants, smart
suits and other paper shufflers who were enthusiastically welcomed by
university management to navigate a way forward as part of a neo-liberal solution
to bring a bit more private sector rigour to the musty halls of academia. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: justify;"><span style="font-size: 14pt; line-height: 150%;">Not only were universities
blessed with heaps of net assets ripe for exploitation, but they were also tax-free
entities with good cash flow guaranteed by government. The government guarantee
stems from the fact that each university is governed by its own State act of
parliament and either that State or the Federal government would step in if a
university got into trouble. Everyone assumes someone will bail universities
out if required. It’s yet to be tested.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: justify;"><span style="font-size: 14pt; line-height: 150%;">Tasmania can only borrow
money because most of its revenue comes from the Australian Government. In turn
UTAS has the same credit rating as the State of Tasmania solely because it is
assumed it will be bailed out by a higher level of government should it face
difficulties. If one were searching for a good example of moral hazard, UTAS would
be the standout choice. When errant behaviour doesn’t have adverse consequences
riskier decisions are encouraged.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: justify;"><span style="font-size: 14pt; line-height: 150%;">By following a money trail,
the reasons for decisions often make a lot more sense than the cosmetic rationalisations
offered by the PR spruikers.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: justify;"><span style="font-size: 14pt; line-height: 150%;">Despite having a pile of
assets to shuffle around the biggest constraint was a clause in UTAS governing
act (Section 7(2)) requiring the Treasurer’s permission to borrow. Not to
worry. Plan B was to forward sell rents for up to 30 years on purpose-built student
accommodation (PBSA). Instead of borrowing to buy and develop a building, UTAS would
use its own resources to do so but then forward sell 30 years rent. It would retain
the building but hand over the rights to rental income from the building in
return for a lump sum. The building would then be reclassified as a Service
Concession Asset with a corresponding liability representing the future rents
to be handed over to the investor. From an accounting perspective it’s analogous
to borrowing money for a building but crucially it avoided the need for the
government to approve the arrangement because it wasn’t a borrowing per se.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: justify;"><span style="font-size: 14pt; line-height: 150%;">Plan C was another
borrowing like arrangement to avoid Section 7(2) – a sale and lease back
arrangement. This was discussed at Council’s meeting of 5<sup>th</sup> April
2019 the day approval was given to impose UTAS’ plan on Hobart City. The discussion
on the <a name="_Hlk159761258">Southern Infrastructure Funding Strategy </a>was
quite revealing:<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpFirst" style="line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 150%; mso-bidi-font-family: Symbol; mso-bidi-font-style: italic; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><i><span style="font-size: 14pt; line-height: 150%;">The sale and leaseback option has been recommended on the basis that the
University does not have the financial capacity to borrow all the funds for
this investment while also retaining the financial flexibility to manage
potential financial shocks. This option involves a lower level of financial risk
for the University.<o:p></o:p></span></i></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 150%; mso-bidi-font-family: Symbol; mso-bidi-font-style: italic; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><i><span style="font-size: 14pt; line-height: 150%;">The sale and leaseback option enables the University’s capital to be
applied to other activities with a potentially higher rate of return than a
property investment, while also enabling the University access to the economies
of scale that a large institutional investor could bring to the construction of
the facility.<o:p></o:p></span></i></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 150%; mso-bidi-font-family: Symbol; mso-bidi-font-style: italic; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><i><span style="font-size: 14pt; line-height: 150%;">The experience with the PBSA on Melville St highlights the need to
clarify in a sale and leaseback contract the ability of the University to
control how it intends to utilise the building.<o:p></o:p></span></i></p>
<p class="MsoListParagraphCxSpLast" style="line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 150%; mso-bidi-font-family: Symbol; mso-bidi-font-style: italic; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><i><span style="font-size: 14pt; line-height: 150%;">The contract needs to specify how the building will be refurbished over
time to maintain fit-for-purpose facilities and provide the University with the
options to either extend the lease or purchase the property outright at
conclusion of the initial term.<o:p></o:p></span></i></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; margin-left: 18.0pt; margin-right: 0cm; margin-top: 0cm; margin: 0cm 0cm 0cm 18pt; text-align: justify;"><span style="font-size: 14pt; line-height: 150%;">A few comments are in order:<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpFirst" style="line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l1 level1 lfo2; text-align: justify; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 150%; mso-bidi-font-family: Symbol; mso-bidi-font-style: italic; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 150%;">The
idea that a sale and leaseback arrangement would lower the financial risks is wishful
thinking. A lender knowing UTAS was having trouble raising funds would charge
higher interest rates in most circumstances. <i><o:p></o:p></i></span></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l1 level1 lfo2; text-align: justify; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 150%; mso-bidi-font-family: Symbol; mso-bidi-font-style: italic; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 150%;">UTAS’
core activities of education and research are loss making. The reason larger
losses weren’t made is because it has owned its buildings rather than having to
pay rents. To adopt as part of the Southern Infrastructure Funding <span style="mso-spacerun: yes;"> </span>a strategy that greater returns could be
achieved by being a tenant rather than a landlord suggests Kool Aid must have
been served as refreshments at the meeting.<i><o:p></o:p></i></span></p>
<p class="MsoListParagraphCxSpLast" style="line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l1 level1 lfo2; text-align: justify; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 150%; mso-bidi-font-family: Symbol; mso-bidi-font-style: italic; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 150%;">A
sale and leaseback option of a purpose-built facility where UTAS was able to
dictate to the extent proposed, suggests a building owner would require a
higher return. What does an owner do with a purpose-built building if the tenant
walks out? Sell at a loss? Refurbish? Let’s face it in these circumstances a sale
and leaseback arrangement would be little different to a loan arrangement from
a borrower struggling to raise funds. A higher rate would be charged.<i><o:p></o:p></i></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: justify;"><span style="font-size: 14pt; line-height: 150%;">It is clear from RTI
documents obtained by Robert Hogan that Treasury considers existing borrowing-like
arrangements when assessing whether to permit UTAS to borrow more. The PBSA
deals which raised $200 million would have been included, as would the sale and
leaseback of the STEM building and central library had they proceeded.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: justify;"><span style="font-size: 14pt; line-height: 150%;">With the prospect of UTAS
having to beg the government for a sceptical Treasury to keep approving more
borrowings based on incomplete plans in an ever-changing world, UTAS decided to
use the $400 million of approvals in place at the time, ditch Tascorp as a
lender and raise $350 million via a bond issue and $50 million via an overdraft
facility.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: justify;"><span style="font-size: 14pt; line-height: 150%;">There is some doubt
according to Robert Hogan as to whether the approvals in place related only to
existing borrowings with Tascorp or whether they validly included other
borrowing such as the bond issue. That is an issue yet to fully play out.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: justify;"><span style="font-size: 14pt; line-height: 150%;">In the meantime, the
value of bonds held by investors has fallen due to rising interest rates. Bonds pay a fixed rate of interest so an investor wishing to sell to another
investor when interest rates have risen will have to accept a lower price. At 31<sup>st</sup>
December 2022 the value of bonds had fallen by $40 million, to $310 million.
Calendar year 2023 saw interest rates continuing to rise so it is likely bond
investors have suffered a similar loss again. We will know when we finally see
UTAS’ 2023 financials. Accounting standards required UTAS to disclose the fair
value of its liabilities. At this stage the bonds are still carried at the issue
price. That’s the amount UTAS will have to pay when the bonds mature. Nevertheless,
the fair value of bonds must be disclosed. The loss in value is not recorded in
UTAS’s books but is disclosed in a note to the accounts. For an investor it’s
also a paper loss unless the investor realises losses by selling to someone
else. If there’s a possibility the bonds were issued without strict legal
authority UTAS might have to cough up for any losses suffered. That’s the worst-case
scenario facing UTAS.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: justify;"><span style="font-size: 14pt; line-height: 150%;">The crucial questions now
facing UTAS even apart from massive planning issues and looming traffic problems, is whether it has enough lines of credit in place to continue to reshape
Hobart City and re-develop Sandy Bay <b><u>and </u></b>whether it will make the
returns it says. The answers to both questions are ‘highly unlikely’, but we
don’t know for sure. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: justify;"><span style="font-size: 14pt; line-height: 150%;">We shouldn’t mindlessly pine
too much for the good ole days but neither should we necessarily accept that
the best way forward is for UTAS to operate an edu-migration Ponzi scheme where
property development takes precedence over the education of locals and the professional
requirements of those dedicated to help in that task. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: justify;"><span style="font-size: 14pt; line-height: 150%;">Just because all
universities do it is not a reason. We can choose to be different.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: justify;"><span style="font-size: 14pt; line-height: 150%;">We need parliamentary
representatives willing to understand the immense problems that will accompany
UTAS if it continues its present path, and help reform governance and reporting
of a significant public entity. Free school lunches and driving
lessons will certainly have community benefits, but at the same time an election campaign which turns a blind eye
to the land mines on the road ahead is wanton recklessness.<o:p></o:p></span></p>tasfintalkhttp://www.blogger.com/profile/04012719835733649162noreply@blogger.com1tag:blogger.com,1999:blog-4314112685994399920.post-1301132324225542472024-02-23T16:27:00.026+11:002024-03-12T14:53:35.052+11:00Election 2024: The debt balloon ahead<p> </p><p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">In the previous four blogs we looked
at the fiscal landscape confronting Tasmania and the major flows in the current
government’s budgets <span style="mso-spacerun: yes;"> </span>- revenue, operating
expenses and debt servicing costs. This blog will try to reconcile these flows
with the increasing levels of borrowings that awaits any future government.<span></span></span></p><a name='more'></a><o:p></o:p><p></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">Let’s start with the latest figures
for the current year as per the 2023/24 Revised Estimates Report (RER) issued
14<sup>th</sup> February 2024. <o:p></o:p></span></p>
<table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; mso-padding-alt: 0cm 5.4pt 0cm 5.4pt; mso-yfti-tbllook: 1184; width: 480px;">
<tbody><tr style="height: 18.75pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 301pt;" valign="bottom" width="401"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79"></td>
</tr>
<tr style="height: 21pt; mso-yfti-irow: 1;">
<td nowrap="" style="height: 21pt; padding: 0cm 5.4pt; width: 301pt;" valign="bottom" width="401">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><b><span style="color: black; font-size: 16pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Income Statement 2023/24<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 21pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="center" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">$m<o:p></o:p></span></b></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 2;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 301pt;" valign="bottom" width="401">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Revenue<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">8,493 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 3;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 301pt;" valign="bottom" width="401">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Expenses <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: red; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">-9,014 </span><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 4;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 301pt;" valign="bottom" width="401"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79"></td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 5;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 301pt;" valign="bottom" width="401">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><b><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Net operating balance NOB<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><b><span style="color: red; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">-521 </span></b><b><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></b></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 6;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 301pt;" valign="bottom" width="401"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79"></td>
</tr>
<tr style="height: 21pt; mso-yfti-irow: 7;">
<td nowrap="" style="height: 21pt; padding: 0cm 5.4pt; width: 301pt;" valign="bottom" width="401">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><b><span style="color: black; font-size: 16pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Reconcile NOB with Fiscal Balance<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 21pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79"></td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 8;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 301pt;" valign="bottom" width="401">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Add depreciation<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">471 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 9;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 301pt;" valign="bottom" width="401">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Less net outlays infrastructure, other capex
etc <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: red; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">-1,018 </span><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 10;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 301pt;" valign="bottom" width="401"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79"></td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 11;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 301pt;" valign="bottom" width="401">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><b><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Fiscal Balance FB<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><b><span style="color: red; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">-1,069 </span></b><b><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></b></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 12;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 301pt;" valign="bottom" width="401"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79"></td>
</tr>
<tr style="height: 21pt; mso-yfti-irow: 13;">
<td nowrap="" style="height: 21pt; padding: 0cm 5.4pt; width: 301pt;" valign="bottom" width="401">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><b><span style="color: black; font-size: 16pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Reconcile FB with cash deficit<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 21pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79"></td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 14;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 301pt;" valign="bottom" width="401">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Add non-cash amounts<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79"></td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 15;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 301pt;" valign="bottom" width="401">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Current
cost DB super estimate<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">76 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 16;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 301pt;" valign="bottom" width="401">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Nominal
interest on unfunded super<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">310 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 17;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 301pt;" valign="bottom" width="401">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Less other cash outlays<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79"></td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 18;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 301pt;" valign="bottom" width="401">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Employer
cost of DB super payments<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: red; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">-352 </span><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 19;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 301pt;" valign="bottom" width="401">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Equity
contributions to govt businesses<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: red; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">-284 </span><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 20;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 301pt;" valign="bottom" width="401">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Other
loans <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: red; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">-34 </span><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 21;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 301pt;" valign="bottom" width="401"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79"></td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 22;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 301pt;" valign="bottom" width="401">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><b><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Cash deficit<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><b><span style="color: red; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">-1,352 </span></b><b><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></b></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 23;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 301pt;" valign="bottom" width="401"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79"></td>
</tr>
<tr style="height: 21pt; mso-yfti-irow: 24;">
<td nowrap="" style="height: 21pt; padding: 0cm 5.4pt; width: 301pt;" valign="bottom" width="401">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><b><span style="color: black; font-size: 16pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Reconcile cash deficit with borrowings<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 21pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79"></td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 25;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 301pt;" valign="bottom" width="401">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Extra borrowings for 2023/24<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: red; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">-1,417 </span><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 26;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 301pt;" valign="bottom" width="401">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Add Increase cash on hand<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">64 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 27;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 301pt;" valign="bottom" width="401"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79"></td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 28; mso-yfti-lastrow: yes;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 301pt;" valign="bottom" width="401">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><b><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Equals cash deficit<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><b><span style="color: red; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">-1,352 </span></b><b><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></b></p>
</td>
</tr>
</tbody></table>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">The table presents revenue and
expense figures used to calculate a net operating balance deficit (a $521m
deficit), long used as the indicator of budget performance. Replacing
depreciation with actual capex outlays on infrastructure, buildings etc gives
us the Fiscal Balance (of negative $1,069 million) which is now used as a
measure of budget sustainability in the government’s Fiscal Strategy.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">But there are other outlays that aren’t
picked up as the RER noted at page 52:<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><i><span style="font-size: 14pt; line-height: 150%;">“While equity contributions do not
impact the General Government Sector Net Operating Balance or the Fiscal
Balance (due to their accounting treatment), they do impact cash balances and
thereby also the level of Government debt.”<o:p></o:p></span></i></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">But there are other adjustments to
the fiscal balance needed to reconcile with the overall cash deficit which will
require extra borrowings each year. The most important relates to DB superannuation,
with another minor adjustment relating to other loans, mainly small loans etc
to businesses from Department of State Growth.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">The Fiscal Balance includes amounts
for annual cost of DB super for current employees and the nominal interest on
the government’s unfunded portion. Both are non-cash amounts, book entries in other
words, as advised by the State actuary. <span style="mso-spacerun: yes;"> </span>Excluding these non-cash amounts and replacing
them with cash contributions from the government required to fund its annual share
of DB pensions and lump sums, gives a cash deficit figure, which in turn can be
reconciled with extra borrowings, the difference being changes to cash on hand.
The cash deficit for the 2024/25 year for the general government is estimated
to be $1,352 million. Borrowings of $1,416 will allow cash on hand to increase
by $64 million.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;"><span style="mso-spacerun: yes;"> </span>In this year 2023/24 the DB adjustments have a
positive effect on the cash deficit figure. The replacement of the non-cash
amounts with cash outlays has a positive $34 million effect of the cash deficit
compared to the fiscal balance. But these figures will gradually change over time.
In 8 to 10 years’ time the current cost of super for DB members will be near
zero as members retire. The government’s annual cost of its unfunded share of
lump sum and pension payments will peak at approximately $500 million. The
nominal super interest component will peak at roughly the same time at about $350
million. This will mean that the cash flow effect will be $150 million worse
than the fiscal balance effect. That’s a $184 million turn around compared to
the current situation.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">Hence even if break even fiscal balance
is achieved as per the current government's aim, annual borrowing will still be required to help pay unfunded super
liabilities, plus fund equity contributions into government businesses (including Tas Water). Funds required for other ordinary operations of government will be squeezed even further. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">There’s challenges ahead at every
turn. Meanwhile the lacklustre election campaign continues with scarcely any
reflection of where we’re headed. We await the release of fiscal strategies
from Labor and the Greens to check whether they’ve bothered to check the road ahead
and tell us how they plan to navigate the obstacles.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><br /></p>tasfintalkhttp://www.blogger.com/profile/04012719835733649162noreply@blogger.com0tag:blogger.com,1999:blog-4314112685994399920.post-91629643631217097852024-02-22T11:40:00.000+11:002024-02-22T11:40:11.443+11:00Election 2024: Revenue<p> </p><p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"></p><p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%;">This blog tales a closer look a
government revenue particularly the vexed question of our own source revenue.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%;">The 2023/24 Revised Estimates Report presented
revenues for the Budget year 2023/24 plus the three years of forward estimates:<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%;"><o:p> </o:p></span></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj7W8mI2CC7at37-FuYu-tyoESsEqZq-vZF46jI1Wniu0Y8iJUMjC8N_2A3pFCqDD1PuC6eHjKNkCq_YmYCK-7zb5fwScX9tnBoNHzrHeDPqfq3TxghzYGWi7l24C33VLK2ZYOBMWo4W1yEtSJRLYw75bCmBd7atRqxUhT0fzwRKttP84lF2L2ATuHBNOAU/s657/rer%20243.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="324" data-original-width="657" height="316" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj7W8mI2CC7at37-FuYu-tyoESsEqZq-vZF46jI1Wniu0Y8iJUMjC8N_2A3pFCqDD1PuC6eHjKNkCq_YmYCK-7zb5fwScX9tnBoNHzrHeDPqfq3TxghzYGWi7l24C33VLK2ZYOBMWo4W1yEtSJRLYw75bCmBd7atRqxUhT0fzwRKttP84lF2L2ATuHBNOAU/w640-h316/rer%20243.png" width="640" /></a></div><br /><p></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%;">Revenue doesn’t change much, from $8.5
billion this year 2023/24 to $8.9 billion 3 years later.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%;">In real terms revenue is static. As
we saw in the fiscal sustainability blog, revenue is failing to keep up with
outlays.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%;">The fall in returns from government
businesses (dividends, tax and rate equivalents) is because the special dividend
from Tascorp representing the annual drawdown of the $730 million of Mersey
Hospital money received in 2017 intended to last 10 years will fall a little
short in the tenth year. Roughly $100 million per year has been/will be drawn
down in the first nine years. Only $27 million will be left for year 10 in 2026/27.
The new government will have to work out how the revenue shortfall will be
fixed in future years. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%;">At least the no- worse off GST
guarantee which was due to expire in 2026/27 has been extended for another 3
years. The Albanese government wasn’t prepared to get off-side with WA voters by
trying to revise GST arrangements which handed a massive boost to WA in the
Morrison years and decided instead to kick the can down the road for another 3
years by giving other States an extended no-worse off guarantee.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%;">But slowing population growth in Tasmania
relative to Australia as a whole will tend to reduce our share of the GST pool
over time. Which will be a problem going forward especially as any extra GST already
received as a result of population share increases, had zero effect on
addressing the needs of the additional population. The gap between the demand
and supply of all services has continued to grow.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%;">Now to have a closer look at own
source revenue. The grants in the above table include all grants from the Feds,
the general-purpose grants (GST share) plus all the specific purpose grants split
comprising both capital and operating grants. The balance of revenue is
own-source revenue, all reasonably self-explanatory.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%;">One of the current government’s
fiscal targets is for not less than 37 per cent of government expenditure be funded
by own-source revenue. Proposed expenditure figures from the RER plus revenue
as per the above table split between grants and own source revenue, enables us
to check the percentage figure in each year. This is shown below:<o:p></o:p></span></p>
<table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; mso-padding-alt: 0cm 5.4pt 0cm 5.4pt; mso-yfti-tbllook: 1184; width: 651px;">
<tbody><tr style="height: 18.75pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 284.0pt;" valign="bottom" width="379"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68">
<p align="center" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">23/24<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68">
<p align="center" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">24/15<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68">
<p align="center" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">25/26<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68">
<p align="center" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">26/27<o:p></o:p></span></b></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 1;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 284.0pt;" valign="bottom" width="379">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Grants<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">5,535 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">5,698 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">5,656 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">5,845 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 2;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 284.0pt;" valign="bottom" width="379">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Own source revenue<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2,958 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">3,020 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">3,082 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">3,090 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 3;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 284.0pt;" valign="bottom" width="379"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68"></td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 4;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 284.0pt;" valign="bottom" width="379">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Total revenue as per RER<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">8,493 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">8,717 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">8,739 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">8,935 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 5;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 284.0pt;" valign="bottom" width="379"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68"></td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 6;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 284.0pt;" valign="bottom" width="379">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Expenses as per RER<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">9,014 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">9,009 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">8,877 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">8,987 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 7;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 284.0pt;" valign="bottom" width="379"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68"></td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 8; mso-yfti-lastrow: yes;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 284.0pt;" valign="bottom" width="379">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Own source revenue as % expenses<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">32.8%<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">33.5%<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">34.7%<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.0pt;" valign="bottom" width="68">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">34.4%<o:p></o:p></span></p>
</td>
</tr>
</tbody></table>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%;">At first glance it looks as if some
progress is being made. But there are a few important caveats:<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpFirst" style="line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14.0pt; line-height: 150%;">In
real terms there is no increase in revenue.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14.0pt; line-height: 150%;">A
replacement for Mersey money is yet to be found.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpLast" style="line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14.0pt; line-height: 150%;">Much
of the improved % is due to a fall in expenses. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%;">As noted in the blog on <a href="https://tasfintalk.blogspot.com/2024/02/this-blog-will-take-closer-look-at.html" target="_blank">spending plans</a>, future expenses assume $300 million of Budget Efficiency Dividends are
found. Even if some are eventually discovered the likely additional outlays required
to meet election promises will likely swamp any savings very quickly. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%;">With zero real growth in revenues the
reason for the downward slide in real operating outlays before debt servicing costs
is glaringly apparent. <span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%;">Paying for infrastructure and debt
servicing costs whilst trying to slow down the inevitable increases in
borrowings, leaves no alternative but austerity implied by the RER. The gap
between necessary services and what will be delivered will only widen. It’s
difficult to draw any other conclusion.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%;">The next blog will draw together some
loose ends and try to reconcile the expected flows (spending, debt servicing
and revenue) with our increasing stock of debt.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;"><o:p> </o:p></span></p><br /><p></p>tasfintalkhttp://www.blogger.com/profile/04012719835733649162noreply@blogger.com0tag:blogger.com,1999:blog-4314112685994399920.post-83886481045770085012024-02-21T14:58:00.029+11:002024-02-23T07:52:34.110+11:00Election 2024: Debt servicing<p> </p><p class="MsoNormal"></p><p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">This blog takes a closer look at debt
servicing costs which increasingly is becoming a crucial matter for service
delivering government(s) afraid to raise more revenue lest voters shy away.<span></span></span></p><a name='more'></a><o:p></o:p><p></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">One of the government’s key targets of
its Fiscal Strategy is to keep a lid on debt servicing costs including the
costs of its defined benefits (DB) superannuation scheme. The target is 6 per
cent of government revenue. In other words, these costs should be less that 6
per cent of revenue. It’s one measure of budget sustainability that’s about to
be breached. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">The following table is from the 2023/24
Revised Estimates Report issued 14<sup>th</sup> February updating the
government’s 23/24 Budget.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;"><o:p> </o:p></span></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiIdDTbJtEkLkXr755FVcnhcsJASUWw2aqTxP8I8siAEM2e3hwxoYFoHtnZJsQTRk9ntcL11QGATOb0Q_a_CuhYVMzilv2q6eUTLu1zFhkwfPQEyYohbbsCv5VHoGCPU_1rQZ7Je2hrsd0Iqtxe19q9GOK_xmvBEuo1DbaQudKLchBQaohKVfpnVxrkGXfU/s683/rer%20242.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="433" data-original-width="683" height="406" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiIdDTbJtEkLkXr755FVcnhcsJASUWw2aqTxP8I8siAEM2e3hwxoYFoHtnZJsQTRk9ntcL11QGATOb0Q_a_CuhYVMzilv2q6eUTLu1zFhkwfPQEyYohbbsCv5VHoGCPU_1rQZ7Je2hrsd0Iqtxe19q9GOK_xmvBEuo1DbaQudKLchBQaohKVfpnVxrkGXfU/w640-h406/rer%20242.png" width="640" /></a></div><br /><p></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><br /></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">The current year 23/24 will be the
last year when the target will be satisfied. Likely increases of between 0.5%
and 1.0% thereafter will slowly choke the Budget and lessen the amounts
available to fund already stretched services.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">The expected growth in DB payments is
best seen from one of the charts from the 2023/24 Budget:<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;"><span style="mso-spacerun: yes;"> </span></span></p><div class="separator" style="clear: both; text-align: center;"><span style="font-size: 14pt; line-height: 150%;"><span style="mso-spacerun: yes;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjDMp0ONLQk6eSX_Ixd1eOTZWdv3hW5Stn_FlR7BZuPnPsIQ3fztxizci5Z4iaq8FZHeXUAFpzQlUEvnr_vgckMJG0kGx4if2wCmT56oYT2QMTpkyiE0hCfZzsXJDeyKstrDsWJf1n5A8nvSMg8EigAOsEobHgFudhuEv0Q6SMNg5Tzqw9rXcPAUn61PLnH/s677/rer%20245.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="369" data-original-width="677" height="348" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjDMp0ONLQk6eSX_Ixd1eOTZWdv3hW5Stn_FlR7BZuPnPsIQ3fztxizci5Z4iaq8FZHeXUAFpzQlUEvnr_vgckMJG0kGx4if2wCmT56oYT2QMTpkyiE0hCfZzsXJDeyKstrDsWJf1n5A8nvSMg8EigAOsEobHgFudhuEv0Q6SMNg5Tzqw9rXcPAUn61PLnH/w640-h348/rer%20245.png" width="640" /></a></span></span></div><span style="font-size: 14pt; line-height: 150%;"><span style="mso-spacerun: yes;"><br /></span></span><p></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">DB costs will keep increasing at the
current rate of $10 million to $15 million pa before peaking in 2035 at around
$500 million pa. Over the ensuing 50 years the annual cost will gradually
decline to zero as baby boomers and their eligible dependents fall off their
perches.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">The costs of DB super were always
going to come under the limit of 6 per cent of annual receipts but it is the
new kid on the block, interest on general government debt, which is starting to
cause havoc. As the table shows general borrowing costs will quadruple over the
4 year period to 2026/27. With continuing fiscal balances all but certain, there
will be no respite. What will stop the bleeding? More revenue? Lower interest
rates? A change of government? Praying?<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">There is still widespread
misunderstanding how the DB scheme works. Employees contribute an agreed amount,
a % of their salary. The government as employer contributes whatever is needed
to pay any defined benefit which may be a lump sum or a lifetime pension. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">As a very rough general rule the
government/employer contribution approximates 15 per cent of a DB member’s
salary. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">Government DB schemes have always
been permitted to fund payments on an emerging costs basis, that is when the liability
to pay a benefit arises, usually when a member leaves, retires, or dies. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">In 1992 the Superannuation Guarantee
Levy (SGL) started requiring employers to pay 3 per cent of employees’ wages
into a superannuation fund. The SGL is now 10.5 per cent. In the case of DB
members the SGL wasn’t an extra impost for employers The SGL became part of the
contributions which DB employers had to pay anyway.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">The result has been the State government
hasn’t even been setting aside the SGL contribution component for DB members.
This has given governments of both persuasions a huge cash flow advantage. Taking
advantage of being able to fund employer contributions on an emerging cost
basis and use that money for other purposes instead of borrowing has been the
choice of all governments in the past 30 years.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">The Labor government prior to 30<sup>th</sup>
June 2012 had a policy of appropriating money each year supposedly to set aside
funds to meet future super liabilities. But there was never any surplus cash.
It was an account with no cash backing. Instead, there was an offsetting
liability account termed the ‘Temporary Debt Repayment A/c’ which was needed to
keep the books in balance. It was a classic Clayton’s account.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">In 2012 the Labor government
abandoned the attempt to set aside any cash. The Liberals have continued the same
pattern.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">In this current year 2023/24 the
employer cost for DB members, roughly 25 per cent of the workforce (my
estimate) is about $75 million. Were they members of an accumulation fund the
government would have to set aside 10.5 per cent of their salaries, or around
$60 million. It sets aside nothing. </span></p><p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">Had it set aside the employers' current service cost for DB members over the 9 years to 2022/23 the amount would have been $1,221 million as per the following table:<o:p></o:p></span></p><p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;"> </span></p><div class="separator" style="clear: both; text-align: center;"><span style="font-size: 14pt; line-height: 150%;"><a href="https://blogger.googleusercontent.com/img/a/AVvXsEiXozk5rrXYyHhHggfu6yxHF2tlLiMff4qB4uWDDSg9_hgMspqJZuveQgvzrfzTD59N1pX0KyxwiBEMRmgBFxCPY0wA6V3tN1r_DQqLd9DMUyNFL4Jnz5t2j_wHVFb9Kg_Xd8RI65p9rsc7ubHz2nj2N4rigmkCZ3n7IPGsG2meiAeYChwAbLpS7YYSFVPm" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="272" data-original-width="144" height="240" src="https://blogger.googleusercontent.com/img/a/AVvXsEiXozk5rrXYyHhHggfu6yxHF2tlLiMff4qB4uWDDSg9_hgMspqJZuveQgvzrfzTD59N1pX0KyxwiBEMRmgBFxCPY0wA6V3tN1r_DQqLd9DMUyNFL4Jnz5t2j_wHVFb9Kg_Xd8RI65p9rsc7ubHz2nj2N4rigmkCZ3n7IPGsG2meiAeYChwAbLpS7YYSFVPm" width="127" /></a></span></div><span style="font-size: 14pt; line-height: 150%;"><br /></span><p></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">But the chickens come home to roost
at some stage. Which they are now doing in flocks. To pay emerging benefits the
only alternative is for the government to borrow. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">It’s always a little galling to hear
the Liberals smugly proclaim how responsible they are, for example this from
the Premier’s 14<sup>th</sup> Feb election announcement:<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><i><span style="background: white; color: #333333; font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Never forget -
under the Labor-Green minority Government………the $1.5 billion superannuation
fund was raided….”<o:p></o:p></span></i></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="background: white; color: #333333; font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The fund was
never raided. There was never any cash there in the first place. The Labor
government tried for a while to window dress but there was never any available
cash. Just a heap of worthless IOUs which were thrown in the bin in 2012.The
Liberals continue with the same approach as Labor, paying DB benefits on an
emerging cost basis, and not setting aside any amounts or pretending to do so
as Labor did until 2012.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="background: white; color: #333333; font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Unfortunately,
that now means borrowing every year to do. This year the extra borrowings needed
are estimated to be $352 million. <span style="mso-spacerun: yes;"> </span>Borrowing
will peak at $500 million pa in 10 years’ time. Just to pay retiring baby boomers.
But it’s not as if they haven’t had 30 years warning. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="background: white; color: #333333; font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Misrepresenting
the true state of our predicament helps build even larger obstacles. If people
don’t understand what’s happened and parties are willing to nurture ignorance
for political purposes, then our hopes of charting a way forward becomes even
harder.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="background: white; color: #333333; font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The increasing
share of receipts being devoted to debt servicing is an immense challenge, one which
election candidates are yet to address.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="background: white; color: #333333; font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">For a long time
the cash flow advantages of not having to even set aside SGL amounts for DB
members has hidden the reality that the emerging cost of DB super would be felt
at some stage. It’s now happened at a time when the fiscal position is under
pressure from all directions.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="background: white; color: #333333; font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The next blog
will have a closer look at the revenue side particularly our own source
revenue.<o:p></o:p></span></p><br /><p></p>tasfintalkhttp://www.blogger.com/profile/04012719835733649162noreply@blogger.com0tag:blogger.com,1999:blog-4314112685994399920.post-57646845427593366702024-02-20T07:57:00.008+11:002024-02-20T07:58:48.584+11:00Election 2024: Spending plans<p> </p><p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">This blog
will take a closer look at expenses in the government’s budget as updated in
the 2023/24 Revised Estimates Report (RER) issued 15<sup>th</sup> February
2024.<span></span></span></p><a name='more'></a><o:p></o:p><p></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">At first glance
it is clear that operating expenses show a small decline over the 4 year
period, from $9,014 million to $8,987 million.<o:p></o:p></span></p><p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;"><br /></span></p><p class="MsoNormal"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhH68Ieos-F1TN2lRA7o5rPf7l0OGFpNBAljEEIgP7jVP0tqoyGZLDtu5iM-eO_iHqUs1mhsHkM95-nhUQetoWGYI_te09-o8uDQ0EPF7qy_1qqdqLIH6Bto6LZTxVguRDHfU-BBtRqZ8Sn4kWBa5P4NmFTc7FipQq23kY8V2-xsTqTQ_KlPjmFXN-fsmgH/s614/rer%20241.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="355" data-original-width="614" height="370" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhH68Ieos-F1TN2lRA7o5rPf7l0OGFpNBAljEEIgP7jVP0tqoyGZLDtu5iM-eO_iHqUs1mhsHkM95-nhUQetoWGYI_te09-o8uDQ0EPF7qy_1qqdqLIH6Bto6LZTxVguRDHfU-BBtRqZ8Sn4kWBa5P4NmFTc7FipQq23kY8V2-xsTqTQ_KlPjmFXN-fsmgH/w640-h370/rer%20241.png" width="640" /></a></div><br /><span style="font-size: 14.0pt; line-height: 107%;"><br /></span><p></p><p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;"></span></p><p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">It is also
clear expenses contain an increasing amount of interest/debt servicing costs and
depreciation (highlighted in red). If these are removed, we end up with a
figure for operating expenses before interest and depreciation which show a
fall over the 4 year period. That’s what the current government is planning to
do – spend less each year. With services already stretched it is unlikely
things will improve. If expenses are adjusted for inflation as per the CPI
figures in the RER the situation is even more dire. The following table gives
the detail:<o:p></o:p></span></p><p class="MsoNormal"><br /></p><p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;"></span></p><table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; width: 651px;"><tbody><tr style="height: 18.75pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0;"><td colspan="5" nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 488.1pt;" valign="bottom" width="651"><p align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: center;"><b><span style="font-size: 14pt;">General Government expenses $m<o:p></o:p></span></b></p></td></tr><tr style="height: 18.75pt; mso-yfti-irow: 1;"><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 296.3pt;" valign="bottom" width="395"></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"><p align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: center;"><b><span style="font-size: 14pt;">23/24<o:p></o:p></span></b></p></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"><p align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: center;"><b><span style="font-size: 14pt;">24/25<o:p></o:p></span></b></p></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"><p align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: center;"><b><span style="font-size: 14pt;">25/26<o:p></o:p></span></b></p></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"><p align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: center;"><b><span style="font-size: 14pt;">26/27<o:p></o:p></span></b></p></td></tr><tr style="height: 18.75pt; mso-yfti-irow: 2;"><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 296.3pt;" valign="bottom" width="395"><p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><span style="font-size: 14pt;">Expenses as per RER<o:p></o:p></span></p></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"><p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="font-size: 14pt;">9,014 <o:p></o:p></span></p></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"><p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="font-size: 14pt;">9,009 <o:p></o:p></span></p></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"><p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="font-size: 14pt;">8,877 <o:p></o:p></span></p></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"><p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="font-size: 14pt;">8,987 <o:p></o:p></span></p></td></tr><tr style="height: 18.75pt; mso-yfti-irow: 3;"><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 296.3pt;" valign="bottom" width="395"><p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><span style="font-size: 14pt;">less interest & depreciation<o:p></o:p></span></p></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"><p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="font-size: 14pt;">927 <o:p></o:p></span></p></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"><p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="font-size: 14pt;">1,010 <o:p></o:p></span></p></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"><p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="font-size: 14pt;">1,090 <o:p></o:p></span></p></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"><p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="font-size: 14pt;">1,154 <o:p></o:p></span></p></td></tr><tr style="height: 18.75pt; mso-yfti-irow: 4;"><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 296.3pt;" valign="bottom" width="395"></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"></td></tr><tr style="height: 18.75pt; mso-yfti-irow: 5;"><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 296.3pt;" valign="bottom" width="395"><p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><span style="font-size: 14pt;">Operating expenses before interest & depr<o:p></o:p></span></p></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"><p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="font-size: 14pt;">8,087 <o:p></o:p></span></p></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"><p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="font-size: 14pt;">7,999 <o:p></o:p></span></p></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"><p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="font-size: 14pt;">7,787 <o:p></o:p></span></p></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"><p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="font-size: 14pt;">7,834 <o:p></o:p></span></p></td></tr><tr style="height: 18.75pt; mso-yfti-irow: 6;"><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 296.3pt;" valign="bottom" width="395"></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"></td></tr><tr style="height: 18.75pt; mso-yfti-irow: 7;"><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 296.3pt;" valign="bottom" width="395"><p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><span style="font-size: 14pt;">CPI increase %<o:p></o:p></span></p></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"><p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="font-size: 14pt;">3.25%<o:p></o:p></span></p></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"><p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="font-size: 14pt;">3.25%<o:p></o:p></span></p></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"><p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="font-size: 14pt;">2.50%<o:p></o:p></span></p></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"><p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="font-size: 14pt;">2.50%<o:p></o:p></span></p></td></tr><tr style="height: 18.75pt; mso-yfti-irow: 8;"><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 296.3pt;" valign="bottom" width="395"><p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><span style="font-size: 14pt;">CPI adjustment factor<o:p></o:p></span></p></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"><p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="font-size: 14pt;">1.0000 <o:p></o:p></span></p></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"><p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="font-size: 14pt;">1.0325 <o:p></o:p></span></p></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"><p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="font-size: 14pt;">1.0583 <o:p></o:p></span></p></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"><p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="font-size: 14pt;">1.0848 <o:p></o:p></span></p></td></tr><tr style="height: 18.75pt; mso-yfti-irow: 9;"><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 296.3pt;" valign="bottom" width="395"></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"></td></tr><tr style="height: 18.75pt; mso-yfti-irow: 10; mso-yfti-lastrow: yes;"><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 296.3pt;" valign="bottom" width="395"><p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><span style="font-size: 14pt;">Expenses adjusted for inflation 23/24 prices <o:p></o:p></span></p></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"><p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="font-size: 14pt;">8,087 <o:p></o:p></span></p></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"><p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="font-size: 14pt;">7,747 <o:p></o:p></span></p></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"><p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="font-size: 14pt;">7,358 <o:p></o:p></span></p></td><td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.95pt;" valign="bottom" width="64"><p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="font-size: 14pt;">7,221 <o:p></o:p></span></p></td></tr></tbody></table>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">Operating
expenses before interest and depreciation are forecast to fall over the next 4
years, by $253 million, from $8,087 million to $7,834 million. In real terms
after adjusting for inflation the fall is $866 million to $7.221 million (in
23/24 dollars terms).<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">That’s a
fall of 10 per cent? Won’t that mean a reduction in services of around 10 per
cent? That’s what the government is planning to do.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">Eagle eyes
would have spotted negative expenses under the label ‘Other expenses’. These
are highlighted in purple. It’s not often one sees negative expenses in an
Income Statement. What are they?<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">In order to
arrest the downward spiraling fiscal balance noted in the last blog on Budget
Sustainability the government included Budget Efficiency Dividends (BED) of
$300 million in its 2023/24 Budget handed down in May 2023. Of that amount $50
million was to be found in 24/25, $100 million in 25/26 and $150 million in 26/27.
The process of identifying which programs are to be axed hasn’t been undertaken,
hence the BED amounts were lumped in as negative ‘Other expenses.’<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">That’s the
challenge ahead for whoever sits on the Treasury benches after the election, to
identify the BED amounts, find funds for all the inevitable election promises
yet stop the fiscal balance spiraling out of control. Pollies are living in
Dreamland. Either that or they’re conspiring to con voters.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">Hopefully electors
will start asking candidates how they propose to tackle the challenges ahead. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">The next
blog will take a closer look at debt servicing costs taking an increasing share
of languishing revenues.<o:p></o:p></span></p>tasfintalkhttp://www.blogger.com/profile/04012719835733649162noreply@blogger.com0tag:blogger.com,1999:blog-4314112685994399920.post-60208896305700510642024-02-19T12:53:00.010+11:002024-02-21T14:59:57.022+11:00Election 2024 : Budget sustainability<p><br /></p><p><br /></p><p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="background: white; color: #333333; font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">With five weeks
of election campaigning to spread the message, this blog site will assist by posting
regular vignettes looking at problems ahead and drilling down into some of the
claims made by politicians vying for our vote.<span></span></span></p><a name='more'></a><o:p></o:p><p></p><p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="background: white; color: #333333; font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"></span></p><p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="background: white; color: #333333; font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Let’s start
with a snippet from Premier Rockliff’s media statement of 14<sup>th</sup>
February the day the election was called:<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><i><span style="background: white; color: #333333; font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">“Tasmania has
come a long way over the last 10 years under majority Liberal Governments
led by Will Hodgman, Peter Gutwein and myself and my team.</span>”<o:p></o:p></i></p><p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt;">What fairer way is there
but to examine that statement using the government's chosen measure of
sustainability, the Fiscal Balance.</span></p><br /><p></p><p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEij9OGo_hPaJ0R05TJ0gP3cdegvv4FaJZZrg9GfF_VStqzNJllWLGh74Qfu-VrF7BIEQvCKL_n5VhB8o_BBwHgOL50M40hb59lIoaGbD8OINF9TrNybWMzCdmRexFG4awo8Cyvd0Z-ZegeW7leEvnBfq8JKFmcVzx5AZgEl0QjLifwBVsikqtZj0cj87YxS/s751/fisc%20bal.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="452" data-original-width="751" height="386" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEij9OGo_hPaJ0R05TJ0gP3cdegvv4FaJZZrg9GfF_VStqzNJllWLGh74Qfu-VrF7BIEQvCKL_n5VhB8o_BBwHgOL50M40hb59lIoaGbD8OINF9TrNybWMzCdmRexFG4awo8Cyvd0Z-ZegeW7leEvnBfq8JKFmcVzx5AZgEl0QjLifwBVsikqtZj0cj87YxS/w640-h386/fisc%20bal.png" width="640" /></a></div><br /><span style="background: white; color: #333333; font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><br /></span><p></p><p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="background: white; color: #333333; font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"></span></p><p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">There is little doubt Tasmania has come
a long way but it is not in the direction the Premier wishes us to believe.<o:p></o:p></span></p><p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">A few additional comments are needed.<o:p></o:p></span></p><p class="MsoListParagraphCxSpFirst" style="line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 150%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]--><span style="font-size: 14pt; line-height: 150%;">The
fiscal balance is the government’s chosen metric to measure the sustainability
of government revenue and expenditure as per the Fiscal Strategy revealed in
the 2023/24 State budget. The government’s fiscal strategy aims to achieve break
even over a rolling four year period.<o:p></o:p></span></p><p class="MsoListParagraphCxSpMiddle" style="line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 150%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]--><span style="font-size: 14pt; line-height: 150%;">The
fiscal balance includes most outlays including spending on infrastructure buildings
and plant. The previously used Net Operating Balance figure was a narrower
profit figure which excluded a lot of capital outlays and was therefore a poor
indicator of budget sustainability.<o:p></o:p></span></p><p class="MsoListParagraphCxSpMiddle" style="line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 150%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]--><span style="font-size: 14pt; line-height: 150%;">The
2017 fiscal balance excludes the $730 million of Mersey money received in that
year. As is it drawn down and spent in each of the following 10 years as
intended it gets included each year as revenue. The year 2026/27 will be the
final drawdown year.<o:p></o:p></span></p><p class="MsoListParagraphCxSpLast" style="line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 150%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-optical-sizing: auto; font-size: 7pt; font-stretch: normal; font-variant-alternates: normal; font-variant-east-asian: normal; font-variant-numeric: normal; font-variant-position: normal; font-variation-settings: normal; line-height: normal;">
</span></span><!--[endif]--><span style="font-size: 14pt; line-height: 150%;">The
2024 fiscal balance figure is from the 2023/24 Revised Estimates Report issued
on 14<sup>th</sup> February 2024.<o:p></o:p></span></p><p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">The chart highlights the budget
crisis awaiting the next government. How will break-even be achieved by
2032/33?<o:p></o:p></span></p><p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;">
</p><p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">Tomorrow’s post will take a closer
look at debt servicing costs and declining operating outlays.<o:p></o:p></span></p><p></p>tasfintalkhttp://www.blogger.com/profile/04012719835733649162noreply@blogger.com0tag:blogger.com,1999:blog-4314112685994399920.post-85876509677501939442023-12-10T09:37:00.003+11:002023-12-10T14:35:47.275+11:00Tasmania's forests: The current position<p> </p><p class="MsoNormal"><b><span style="font-size: 14pt; line-height: 107%;">CHALLENGES
FOR TASMANIAN PUBLIC FOREST MANAGEMENT: THE CURRENT POSITION</span><o:p></o:p></b></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">This paper
was written for the Forest Economics Conference held at Mona from 28<sup>th</sup>
to 30<sup>th</sup> November 2023.<o:p></o:p></span></p>
<p class="MsoNormal"><b><span style="font-size: 16pt; line-height: 107%;"><o:p> </o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-size: 16pt; line-height: 107%;">CONTENTS<o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-size: 16pt; line-height: 107%;">Background<o:p></o:p></span></b></p>
<p class="MsoNormal" style="margin-left: 36pt;"><span style="font-size: 14pt; line-height: 107%;">Tasmania’s forests: A snapshot<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: 36pt;"><span style="font-size: 14pt; line-height: 107%;">Sustainable Timber Tasmania (STT): An overview<o:p></o:p></span></p>
<p class="MsoNormal"><b><span style="font-size: 16pt; line-height: 107%;">Issues<o:p></o:p></span></b></p>
<p class="MsoNormal" style="margin-left: 36pt;"><span style="font-size: 14pt; line-height: 107%;">Tragedy of the commons<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: 36pt;"><span style="font-size: 14pt; line-height: 107%;">STT: A business, a guardian, or a godfather<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: 36pt;"><span style="font-size: 14pt; line-height: 107%;">STT in transition<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: 36pt;"><span style="font-size: 14pt; line-height: 107%;">Current markets<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: 36pt;"><span style="font-size: 14pt; line-height: 107%;">Information asymmetry<o:p></o:p></span></p>
<p class="MsoNormal"><b><span style="font-size: 16pt; line-height: 107%;">Summary<o:p></o:p></span></b></p>
<p class="MsoNormal" style="margin-left: 36pt;"><span style="font-size: 14pt; line-height: 107%;">Forestry facts<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: 36pt;"><span style="font-size: 14pt; line-height: 107%;">Less popular forestry facts<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: 36pt;"><span style="font-size: 14pt; line-height: 107%;">Challenges<o:p></o:p></span></p>
<p class="MsoNormal"><b><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%;"><o:p> <span></span></o:p></span></b></p><a name='more'></a><p></p>
<p class="MsoNormal"><b><span style="font-family: "Times New Roman",serif; font-size: 16pt; line-height: 107%;">Background<o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%;">Tasmania’s forests: A snapshot<o:p></o:p></span></b></p>
<p class="MsoNormal"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%;">Tasmania’s native forests cover three million hectares,
about 40 per cent of the State. Two thirds are publicly owned of which only 21
per cent is currently available for production. Almost as much again is
designated as available for future harvesting should the necessary approvals be
granted. Most native forest harvesting occurs on public land. <span style="mso-spacerun: yes;"> </span>In 2022/23, 89 per cent of timber logged from
native forests came from publicly owned forests, with the balance from private
forests. Of the total, 25 per cent were sawlogs, peelers for Ta Ann<a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftn1" name="_ftnref1" style="mso-footnote-id: ftn1;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[1]</span></span><!--[endif]--></span></span></a> and peelers for export,
with the balance of 75 per cent destined for woodchips and a small amount of
fuelwood.<span style="mso-spacerun: yes;"> </span>Of the sawlogs and peeler logs
locally processed only 20 per cent ends up as finished product<a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftn2" name="_ftnref2" style="mso-footnote-id: ftn2;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[2]</span></span><!--[endif]--></span></span></a>. Half of the waste is
sawdust whilst the balance is added to the woodchip pile. <a style="mso-comment-date: 20231030T1958; mso-comment-parent: 1; mso-comment-reference: JL_2;"></a><a style="mso-comment-date: 20231020T1518; mso-comment-reference: BH_1;"><span style="mso-comment-continuation: 2;">The</span></a></span><span class="MsoCommentReference"><span style="font-size: 8pt; line-height: 107%;"><span style="mso-special-character: comment;"> </span></span></span><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%;">following
chart sets out the production (in quantity terms) in the 2022/23 year.<a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftn3" name="_ftnref3" style="mso-footnote-id: ftn3;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[3]</span></span><!--[endif]--></span></span></a><o:p></o:p></span></p><p class="MsoNormal"><br /></p>
<p class="MsoNormal"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%;"><o:p> <span> </span><span> </span><span> </span><span> <span> </span></span></o:p></span><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjmGQwY0qNsAFDCjMZDjYC_6LUGwuCuIMC3umhv7kMSjiAlzi4XrzGuPaRgRto-yqRkfWAhY_-GeSltEsIuWGV5yPwz2h4qP8Y2E_aqRon9wz8NPXKkOXhuvFqWtWN5ByNVOcNC5la5RtUg1cBWq0kTmfgrPYQUXQ1dhkmlRp1-w1ycHK2UotzKvmrz_xT_/s751/mona1.png" style="font-family: "Times New Roman", serif; font-size: 18.6667px; margin-left: 1em; margin-right: 1em; text-align: center;"><img border="0" data-original-height="452" data-original-width="751" height="386" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjmGQwY0qNsAFDCjMZDjYC_6LUGwuCuIMC3umhv7kMSjiAlzi4XrzGuPaRgRto-yqRkfWAhY_-GeSltEsIuWGV5yPwz2h4qP8Y2E_aqRon9wz8NPXKkOXhuvFqWtWN5ByNVOcNC5la5RtUg1cBWq0kTmfgrPYQUXQ1dhkmlRp1-w1ycHK2UotzKvmrz_xT_/w640-h386/mona1.png" width="640" /></a></p>
<p class="MsoNormal" style="text-indent: 36pt;"><br /></p>
<p class="MsoNormal"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%;"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%;">Apart from the 75 per cent of product which is destined
to the woodchipper the other striking feature of the chart is the small amount
of sawlogs sourced from private forests, and the continued reliance on publicly
owned forests to source native timber for the industry.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%;">The current plantation estate adds another 10 per
cent, or about 272,000 hectares to the total forested area in Tasmania. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%;">In 2022/23, in volume terms, plantations produced 80
per cent of total product from forests (52 per cent from hardwood plantations
and 28 per cent from softwoods). The balance of 20 per cent was from native
forests. <a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftn4" name="_ftnref4" style="mso-footnote-id: ftn4;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[4]</span></span><!--[endif]--></span></span></a> <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%;"><o:p> </o:p></span></p><div class="separator" style="clear: both; text-align: center;"><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEizZ1N73nRptOpU8WtRJl_HtolFUd-UrjxU3Y8lq9L7EgSdl1OblgRLrsai8o7vay_DJG-zz11XEAFVe60q_NX9VrlUbNjoiv-5GZF69hCzUWcYTRuwgzcScYE2P_ayCq6uuCK2_IbPs1erXK-k5J83Rt0xH1FlR01BD8iz4uQrReZnju3iANldb39xnqon/s752/mona2.png" style="font-size: 14pt; margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="484" data-original-width="752" height="413" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEizZ1N73nRptOpU8WtRJl_HtolFUd-UrjxU3Y8lq9L7EgSdl1OblgRLrsai8o7vay_DJG-zz11XEAFVe60q_NX9VrlUbNjoiv-5GZF69hCzUWcYTRuwgzcScYE2P_ayCq6uuCK2_IbPs1erXK-k5J83Rt0xH1FlR01BD8iz4uQrReZnju3iANldb39xnqon/w640-h413/mona2.png" width="640" /></a></div><br /><div class="separator" style="clear: both; text-align: center;"><span style="font-family: "Times New Roman", serif; font-size: 14pt; text-align: left;"> </span></div>
<p class="MsoNormal"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%;"><o:p> </o:p></span><span style="font-family: "Times New Roman", serif; font-size: 14pt;">Almost all plantations were established </span><span style="font-family: "Times New Roman", serif; font-size: 14pt;"> </span><span style="font-family: "Times New Roman", serif; font-size: 14pt;">with public assistance either directly by STT</span><a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftn5" name="_ftnref5" style="font-family: "Times New Roman", serif; font-size: 14pt;" title=""><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span style="font-size: 14pt; line-height: 107%;">[5]</span></span></span></a><span style="font-family: "Times New Roman", serif; font-size: 14pt;"> funded by grants, or
indirectly via </span><span style="font-family: "Times New Roman", serif; font-size: 14pt;"> </span><span style="font-family: "Times New Roman", serif; font-size: 14pt;">tax concessions to
private owners of managed investment schemes </span><a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftn6" name="_ftnref6" style="font-family: "Times New Roman", serif; font-size: 14pt;" title=""><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span style="font-size: 14pt; line-height: 107%;">[6]</span></span></span></a><span style="font-family: "Times New Roman", serif; font-size: 14pt;">(MIS). STT still owns about
22,000 hectares of hardwood plantations. </span><span style="font-family: "Times New Roman", serif; font-size: 14pt;"> </span><span style="font-family: "Times New Roman", serif; font-size: 14pt;">The following chart gives more detail about
the current ownership of the State’s plantation estate.</span><a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftn7" name="_ftnref7" style="font-family: "Times New Roman", serif; font-size: 14pt;" title=""><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span style="font-size: 14pt; line-height: 107%;">[7]</span></span></span></a></p>
<p class="MsoNormal"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%;"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%;"><span style="mso-spacerun: yes;"> <span> </span><span> </span><span> </span><span> </span></span><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiu3InUQX77GA-_ziN1rhs_CdLqpOELEfDCslDiGcC43Nr0Hmd7G8SX5JAqrt7dk4em0h1S2SV_BV-QZerTShIATrsbwydQeim6F7WKg1qH7xdb2WqM5K-51Kt2r68zy-TCos4G52veJgHXVv0187-ekg6bLSrukBEPYtYGAxE7XWfpH9eQlI_GyvXWW8UH/s748/mona3.png" style="font-size: 14pt; margin-left: 1em; margin-right: 1em; text-align: center;"><img border="0" data-original-height="445" data-original-width="748" height="381" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiu3InUQX77GA-_ziN1rhs_CdLqpOELEfDCslDiGcC43Nr0Hmd7G8SX5JAqrt7dk4em0h1S2SV_BV-QZerTShIATrsbwydQeim6F7WKg1qH7xdb2WqM5K-51Kt2r68zy-TCos4G52veJgHXVv0187-ekg6bLSrukBEPYtYGAxE7XWfpH9eQlI_GyvXWW8UH/w640-h381/mona3.png" width="640" /></a><span style="mso-spacerun: yes;"><span><br /><br /> </span></span></span></p>
<p class="MsoNormal"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%;">Of the private plantations on private land
approximately 90,000 hectares are owned under the New/Forests/Forico<a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftn8" name="_ftnref8" style="mso-footnote-id: ftn8;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[8]</span></span><!--[endif]--></span></span></a> banner and about 19,000 by
Reliance Forest Fibre<a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftn9" name="_ftnref9" style="mso-footnote-id: ftn9;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[9]</span></span><!--[endif]--></span></span></a> . The former were a
mixture of Gunns’ MIS plantations and Gunns’ own plantations<a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftn10" name="_ftnref10" style="mso-footnote-id: ftn10;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[10]</span></span><!--[endif]--></span></span></a>. The latter were
originally FEA’s<a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftn11" name="_ftnref11" style="mso-footnote-id: ftn11;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[11]</span></span><!--[endif]--></span></span></a>
MIS plantations.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%;">Private plantations on public land were sold by STT to
help buttress its native forest activities which were running at a loss. <span style="mso-spacerun: yes;"> </span>The sales were via forestry rights whereby
ownership of the land remained in public hands, but the rights owner acquired
the trees plus a right to conduct forestry operations for the term of the
right. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%;">The hardwood plantations on public land are a mixture
of Gunns’ MIS plantations originally grown on STT/Crown land but transferred to
STT following Gunns’ collapse, plus other plantations funded by Federal TFA and
TCFA grants<a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftn12" name="_ftnref12" style="mso-footnote-id: ftn12;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[12]</span></span><!--[endif]--></span></span></a>
funds to help STT transition to a plantation-based future. Reliance Forest Fibre
bought the 30,000 hectares of hardwood plantations from STT via a forestry
rights deal in 2017/18.<a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftn13" name="_ftnref13" style="mso-footnote-id: ftn13;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[13]</span></span><!--[endif]--></span></span></a> The private softwood plantations
on public land are managed by New Forests on behalf of foreign pensions funds
and other large investors<a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftn14" name="_ftnref14" style="mso-footnote-id: ftn14;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[14]</span></span><!--[endif]--></span></span></a>. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%;">It is a little difficult to compare returns from
public native forests and private plantations based on published figures
because the end product differs. In the case of say STT, the end product is a
mill door delivered log, whereas for the private operators the end product may
be exported woodchips or sawn softwood timber for the local market. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%;">STT has chosen to disclose less information each year.
In 2022/23 the sparsely available information doesn’t include the long-abandoned
disclosure of mill door revenue for various timber types. There is no breakup
of revenue between timber types, not even between plantations and native forests.
There is fortunately a little information on the quantity side, the tonnes<a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftn15" name="_ftnref15" style="mso-footnote-id: ftn15;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[15]</span></span><!--[endif]--></span></span></a> and areas harvested. For
both native forests and hardwood plantations the harvest yield was similar, at
230 tonnes per hectare for 2022/23.<a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftn16" name="_ftnref16" style="mso-footnote-id: ftn16;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[16]</span></span><!--[endif]--></span></span></a><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%;">STT doesn’t disclose the ages of logged forests. If
the plantation hardwoods were 15 years old that implies an annual growth rate of
15 tonnes per hectare. If the logged native forests are 60-year-old regrowth,
that implies an annual growth rate of 4 tonnes per hectare. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%;">STT’s revenue for 2022/23 works out to be $86 per
tonne across all timber types. <span style="mso-spacerun: yes;"> </span>It’s not clear
from STT’s Annual Report but this is likely to be mostly on a mill door basis,
but some, possibly the plantation<span style="mso-spacerun: yes;"> </span>timber,
could be on a stumpage basis,<a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftn17" name="_ftnref17" style="mso-footnote-id: ftn17;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[17]</span></span><!--[endif]--></span></span></a> implying the average mill
door delivered price was probably around<span style="mso-spacerun: yes;">
</span>$100 per tonne .The price for plantation hardwood logs was believed to
have been close to $100 per tonne in <span style="mso-spacerun: yes;"> </span>22/23
which doesn’t leave much scope for premium sawlogs to have fetched prices much
above the average. Certainly, nowhere near the price needed to compensate for
the much slower growth rates for native forests. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%;">In summary, production from plantations far exceeds
that from native forests, both in volume and value terms even though Tasmania
has proportionally the largest native forest industry in the Federation. Hardwood
plantations are currently experiencing a small decline, in annual value terms
as the first harvest of MIS timber has peaked, and in terms of size as
approximately 25 per cent of harvested areas aren’t replanted. Softwood
plantations principally produce sawlogs for Timberlink P/L<a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftn18" name="_ftnref18" style="mso-footnote-id: ftn18;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[18]</span></span><!--[endif]--></span></span></a> and woodchips for Norske
Skog paper mill<a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftn19" name="_ftnref19" style="mso-footnote-id: ftn19;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[19]</span></span><!--[endif]--></span></span></a>.
Hardwood plantations produce mainly woodchips (for export) and peeler logs (for
export). <span style="mso-spacerun: yes;"> </span>The absence of all but a few
sawlogs or peeler logs from private forests, both plantations and native
forests, demonstrates there are still considerable challenges for the industry
to prepare for the future. <o:p></o:p></span></p>
<p class="MsoNormal"><b><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%;"><o:p> </o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%;">Sustainable Timber Tasmania (STT): An
overview<o:p></o:p></span></b></p>
<p class="MsoNormal"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%;">STT is the Forest Manager appointed pursuant to the
Forest Management Act 2013 (FMA) to look after Tasmania’s public native forests.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><span style="background: white; color: black; font-family: "Times New Roman",serif; font-size: 14pt; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Section 8 sets out STT’s functions:<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><a name="GS8@Hpa@EN"></a><span style="font-family: "Times New Roman",serif; font-size: 14pt; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: normal; margin-bottom: 6.0pt; margin-left: 36.0pt; margin-right: 0cm; margin-top: 0cm; margin: 0cm 0cm 6pt 36pt;"><i><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">(a) to manage and control all permanent timber
production zone land.<o:p></o:p></span></i></p>
<p class="MsoNormal" style="background: white; line-height: normal; margin-bottom: 6.0pt; margin-left: 36.0pt; margin-right: 0cm; margin-top: 0cm; margin: 0cm 0cm 6pt 36pt;"><a name="GS8@Hpb@EN"></a><i><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">(b) to undertake forest operations on permanent
timber production zone land for the purpose of selling forest products.<o:p></o:p></span></i></p>
<p class="MsoNormal" style="background: white; line-height: normal; margin-bottom: 6.0pt; margin-left: 36.0pt; margin-right: 0cm; margin-top: 0cm; margin: 0cm 0cm 6pt 36pt;"><a name="GS8@Hpc@EN"></a><i><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">(c) such other functions as are approved in writing
by the Minister and the Treasurer.<o:p></o:p></span></i></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">STT is the Forest Manager for
the forest estate which in most instances is owned by the Crown. STT includes
the forest estate which it manages in its financial statements. Essentially
STT’s role is to undertake timber operations on designated land. It is not
known whether shareholder Ministers have directed STT to pursue other functions
pursuant to Section 8(c).<o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">As we have seen 89 per cent of
native forest production was from public forests, STT’s <span style="mso-spacerun: yes;"> </span>2022/23 Annual Report provides a breakup for
timber types in that year (in quantity terms)<a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftn20" name="_ftnref20" style="mso-footnote-id: ftn20;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">[20]</span></span><!--[endif]--></span></span></a>:<o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;"><o:p> <span> </span><span> </span><span> </span><span> </span><span> </span></o:p></span><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhoKRPeGMntYC5oCx8-fB1ub1XDf3sHmwdJcT1ljbloGCdmUSWKRPFuBTIzyNXJ2y31SZ0NoKjLideUQZjFEC3OD18MqII7bgw6sJArTaYatHAvJ5NFBLpqQkk5Jr20tNm3XJ8XUYsFPw2PdOp6tS8uZH7NWA7HbQDEY-KaItLBG0oqd11SvxdudjFjjJHS/s750/mona4.png" style="background-color: transparent; font-family: "Times New Roman", serif; font-size: 18.6667px; margin-left: 1em; margin-right: 1em; text-align: center;"><img border="0" data-original-height="451" data-original-width="750" height="384" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhoKRPeGMntYC5oCx8-fB1ub1XDf3sHmwdJcT1ljbloGCdmUSWKRPFuBTIzyNXJ2y31SZ0NoKjLideUQZjFEC3OD18MqII7bgw6sJArTaYatHAvJ5NFBLpqQkk5Jr20tNm3XJ8XUYsFPw2PdOp6tS8uZH7NWA7HbQDEY-KaItLBG0oqd11SvxdudjFjjJHS/w640-h384/mona4.png" width="640" /></a></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt; text-indent: 36pt;"><span style="font-family: "Times New Roman", serif; font-size: 14pt;"> </span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Production is largely driven by
the statutory requirements of the FMA to supply a minimum quantity of high-quality
sawlogs, by contracts with sawlog buyers and by long term contracts to supply
peeler billets to Ta Ann.<o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">STT’s primary function is to
manage the forest estate for timber production. There is an almost universal
recognition that native forests are crucial perpetual ecosystems, yet STT
treats native forests as a timber source, not entirely surprising since that is
its statutory role. Not only are non-timber values ignored when STT values its
forest estate, the assessment of net proceeds from harvestable timber ignores
the costs of regenerating native forests, which is difficult to understand
given that a native forest is a perpetual ecosystem. This methodology allows
STT to claim it is financially sustainable.<o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Apart for forest land and trees most
of which it doesn’t legally own, STT is a shell company, with a few bits of
property plant and equipment and working capital offset by payables and
employee entitlements, the latter fortunately much lower since the government
agreed to assume over 80 per cent of STT’s unfunded superannuation liability in
2017. STT no longer has any borrowings. It can’t service any debt. Whilst it
continues to post headline profits <a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftn21" name="_ftnref21" style="mso-footnote-id: ftn21;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">[21]</span></span><!--[endif]--></span></span></a>
its cash earnings<a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftn22" name="_ftnref22" style="mso-footnote-id: ftn22;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">[22]</span></span><!--[endif]--></span></span></a>
<span style="mso-spacerun: yes;"> </span>before government operating grants are
always negative and made even worse by including the mandatory costs of
regenerating felled forests. It wasn’t until 2022/23 that STT started expensing
the costs of regeneration. Previously they were capitalised thereby overstating
profits. If one also includes other cash outlays for minor plant, motor
vehicles and roads which are still capitalised, the cash deficits from STT’s
forest operations are even larger.<o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">STT’s net equity of around $220 million comprises
the value of the forest estate. A forest estate is valued on the basis of
future net proceeds<a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftn23" name="_ftnref23" style="mso-footnote-id: ftn23;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">[23]</span></span><!--[endif]--></span></span></a>.
STT is only profitable if the value of its forest estate increases. Its equity
position for all intents and purposes is the value of expected net future
proceeds derived by cherry picking a few numbers whilst ignoring others. <span style="mso-spacerun: yes;"> </span>Even though replanting costs are now expensed
they are not included in estimates of
future net proceeds. Nor are roading costs. If both are included it is likely
the value of STT’s forest estate would be negative. Its equity position would
become a negative number representing a provision for future losses.<a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftn24" name="_ftnref24" style="mso-footnote-id: ftn24;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">[24]</span></span><!--[endif]--></span></span></a>
<a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftn25" name="_ftnref25" style="mso-footnote-id: ftn25;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">[25]</span></span><!--[endif]--></span></span></a><o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">The 2022/23 Annual Report gave a
glimmer of what might be possible in the future. STT earned $299,000 worth of
ACCUs.<a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftn26" name="_ftnref26" style="mso-footnote-id: ftn26;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">[26]</span></span><!--[endif]--></span></span></a>
It would be interesting to know if this relates to land legally owned by STT or
whether it relates to Crown land which forms the bulk of STT’s forest estate.
Not to recognise land as having any value but including income from abatement
measures on that land would be a puzzling outcome. <o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Now that STT recognises land as
having a value separate from trees, how should it be valued? Land which STT
legally owns has been reintroduced into the financials at historical cost but how
should the rest being Crown land which STT is required to manage be treated? With
a zero value as per the 22/23 financials? <span style="mso-spacerun: yes;"> </span>That doesn’t appear to be a prudent basis for
sensible public policy.<o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">As a corollary should a notional
rent be included when determining future net market proceeds and hence the
value of native forests on Crown land? <span style="mso-spacerun: yes;"> </span>If one was valuing two similar coupes, one on
leasehold land and one on freehold land, one would need to include a notional
rent on the freehold land so a fair value for both crops was calculated. <span style="mso-spacerun: yes;"> </span>Not having to earn a return from public land
may be one reason public forests may have been overexploited. If notional rents
were included when assessing future harvest proceeds and hence values, there is
little doubt native forests would have a very large negative value. STT’s
financial position would be clear for everyone to see, an entity with negative
cash flows and negative equity needing a letter of comfort from the Treasurer
to keep trading.<o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><b><span style="color: black; font-family: "Times New Roman",serif; font-size: 16pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;"><o:p> </o:p></span></b></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><b><span style="color: black; font-family: "Times New Roman",serif; font-size: 16pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Issues<o:p></o:p></span></b></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><b><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Tragedy of the commons<o:p></o:p></span></b></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">By claiming financial sustainability
STT has diverted attention away from its commons dilemma<a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftn27" name="_ftnref27" style="mso-footnote-id: ftn27;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">[27]</span></span><!--[endif]--></span></span></a>
where a few individuals over-consume a resource at the expense of the broader
community. STT role is to supervise our native forests and to derive the
greatest value from them. Faced with a commons dilemma, STT refers to the flow
on effects of its operations as a way of promoting the broader economic and
social benefits of its operations. Whilst undoubtedly true, to some extent at
least, this in no way helps mitigate a commons tragedy. The flow-on-benefits
argument does not acknowledge there may be alternative uses for the resources. The
externalities or spill over benefits have enormous benefit potential for Tasmanian
communities. This is the nub of the native forests issue. There is a growing consensus
that native forests need to be viewed, not merely a source for timber, but as a
perpetual repository hosting a variety of non-timber values crucial for the
common good. To ignore this at best is poor public policy, and at worst a
tragedy we will all come to regret.<o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><b><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">STT: A business, a guardian or a
godfather?<o:p></o:p></span></b></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">STT operates in a grey area.
Were it a government agency, national competition rules would require it to
charge according to full cost attribution (FCA) rules laid down by OTTER, the Tasmanian
Economic Regulator. As a GBE it needs to avoid competing with private
businesses if it is propped up by its owner, the Tasmanian government.
Operating as a GBE gives STT space to distance itself from public scrutiny. It
is easier to invoke commercial in confidence.<o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">STT’s job is a difficult one. Navigating
its way past the commons obstacles, trying to free itself from government
handouts whilst as a guardian of native forests risking being held captive by
the industry it is supposed to supervise; it cannot be easy. Any resolve to
reassess the role and function of native forests of native forest, must
inevitably lead to a review of the role of STT as laid out in the Forest
Management Act. What would optimal management of Tasmania’s forests look like?
What is the most advantageous path forward?<o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">STT is not just a timber seller.
It guides and shapes the industry. Prior to receivership of Gunns in 2011, STT
was the monopoly owner of a hugely valuable native forest estate. By allowing Gunns
to over exploit the forests for inadequate returns Gunns became the dominant player
in the Tasmanian forest industry. This meant its demise left a gaping hole. <o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">While Gunns was insolvent, STT famously
intervened and backed one of its highly geared clients with a history of losses
despite government handouts, to attempt a purchase of the Triabunna wood chip
mill. Treasury were scathing of the proposed deal. The effort failed, yet even
today STT provides working capital to clients via repurchase deals. <o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">There may be a sound argument to
assist infant industries but as most economists will attest there’s a real
danger infants will become senile adults still needing to be spoon fed. The
expectation that STT exists to supply timber at prices that will allow the
industry and all contractors who comprise the supply chain to be profitable, is
endemic.<o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><b><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">STT in transition?<o:p></o:p></span></b></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">STT is in constant transition.
But to where exactly?<o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Twenty-five years ago, STT owned
50,000 hectares of softwood plantation and had the beginnings of a hardwood
plantation estate following the receipt of Helsham grant funds. Since then,
grants pursuant to the TFA and TCFA agreements were provided</span><span style="background: white; color: #222222; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%;"> to allow STT to transition to a
plantation-based hardwood operation. The first tranche of the softwood
plantations was sold over 20 years ago because the then government needed funds
to fix its own balance sheet. The rest of the softwoods plus the most of the
TFA and TCFA funded plantation have since been sold to help STT survive. Most
of the trees intended to help STT transition to a plantation-based future have all
been sold well before maturity at considerable loss. With only about 22,000
hectares of hardwoods remaining, all approaching harvest time in the next 10
years or so, it would not surprise to see STT exit the plantation business,
leaving the field wide open for a manager like New Forests to either take over
or at least manage any future replanting.</span><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;"><o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><b><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Current markets<o:p></o:p></span></b></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">A quick look at the 4 main
categories:<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpFirst" style="background: white; line-height: 115%; margin-bottom: 6pt; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="color: black; font-family: Symbol; font-size: 14pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">The
native timber market is distorted by the over-arching behaviour of STT and its
inaccurate valuation and accounting methods. It barely warrants the label
market. It’s a clearing house for a few insiders who are privy to price and
quantity information necessary for even the most rudimentary markets. Even the
major <span style="mso-spacerun: yes;"> </span>by product woodchips has been controlled
by Artec a private monopoly which moved into the space vacated by Gunns,
because national competition rules prevent STT from competing with private
companies. Midway, an ASX listed company has recently expanded its operations
in Tasmania and has done a deal with STT for the supply of thinnings from
regrowth forests, believed to be 300,000 tonnes per annum. <span style="mso-spacerun: yes;"> </span>The market is fraught and lacking
transparency. As a result, only wealthy hobbyists, farmers and insiders will
risk investing in a business where there is such a long time between outlay and
reward, where market signals are muted and returns uncertain. <o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="background: white; line-height: 115%; margin-bottom: 6pt; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="color: black; font-family: Symbol; font-size: 14pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">The
softwood sawlog business is dominated by the vertically integrated operations
of New Forests and its associated sawmill operations owned by Timberlink P/L.
Smaller softwood sawmills were squeezed when New Forests bought both STT’s
former softwood plantations and the processing facilities from Gunns’ Receivers.
New Forests have also purchased softwood plantations used to supply Norske
Skog. Long term investors contemplating establishing new softwood plantations
would be understandably wary. It’s a limited market by any stretch.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="background: white; line-height: 115%; margin-bottom: 6pt; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="color: black; font-family: Symbol; font-size: 14pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Hardwood
plantations for woodchips are almost exclusively the domain of New Forests/Forico
and Reliance Forest Fibre which both have vertical integrated businesses from
growing through to exporting. Add to this the trauma caused by failed MISs and<span style="mso-spacerun: yes;"> </span>potential growers will be reticent. More
domestic end users rather than exporting is the only way to build a market
necessary to attract new plantings by new participants. With existing operators
backed by large superannuation funds looking for new opportunities, the entry
barriers for new smaller players are real.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpLast" style="background: white; line-height: 115%; margin-bottom: 6pt; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="color: black; font-family: Symbol; font-size: 14pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">The
development of a reliable functioning market for hardwood sawlogs and peeler
logs from plantations received a huge setback when STT abandoned its attempts
to lead the way, instead selling its government funded plantations so it could
survive for a few more years, a decision no doubt in part caused by the need to
satisfy the long-term supply contracts that underpin STT’s cash flow problems. The
massive injections of taxpayer funds to develop hardwood plantations have ended
up subsidising overseas pension funds and large investors.<o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><b><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Information asymmetry<o:p></o:p></span></b></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">At every turn, wherever one looks
there is little evidence of functioning markets. Markets are supposed to be
places where buyers and sellers, and potential buyers and sellers meet
voluntarily to exchange information and possibly reach deals. Information about
prices, growth rates, ages at harvest are conspicuously lacking. The lack of
this information caused MISs to run much longer than they should have. It is difficult
for outsiders to obtain the necessary information to make informed decisions. And
even well-intentioned insiders can’t divulge data to outsiders because it’s
commercial in confidence. This has been a pattern with the forest industry in
Tasmania.<o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Information asymmetry is
hindering <span style="mso-spacerun: yes;"> </span>the management of a crucial resource,
not just the timber resource on public lands but all the other more crucial
non-timber values which constitute a forest eco-system. <o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><b><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;"><o:p> </o:p></span></b></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><a name="_Hlk153089570"><b><span style="color: black; font-family: "Times New Roman",serif; font-size: 16pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Summary<o:p></o:p></span></b></a></p>
<span style="mso-bookmark: _Hlk153089570;"></span>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><b><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Forest facts<o:p></o:p></span></b></p>
<p class="MsoListParagraphCxSpFirst" style="background: white; line-height: 115%; margin-bottom: 6pt; mso-add-space: auto; mso-list: l1 level1 lfo2; text-indent: -18pt;"><!--[if !supportLists]--><span style="color: black; font-family: Symbol; font-size: 14pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Native
forests are perpetual ecosystems yet are valued by STT on the basis that trees are
a single rotation crop, where regeneration costs are ignored and most forest land
is assumed to have a nil value,<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="background: white; line-height: 115%; margin-bottom: 6pt; mso-add-space: auto; mso-list: l1 level1 lfo2; text-indent: -18pt;"><!--[if !supportLists]--><span style="color: black; font-family: Symbol; font-size: 14pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Changes
in the estimates of future net proceeds from a timber crop has a material
impact on the determination of tree crop value which determines the
profitability of native forest logging.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="background: white; line-height: 115%; margin-bottom: 6pt; mso-add-space: auto; mso-list: l1 level1 lfo2; text-indent: -18pt;"><!--[if !supportLists]--><span style="color: black; font-family: Symbol; font-size: 14pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Harvesting
is a cashing event. When forests are valued, changes are brought to account as
income (or losses) each year. Harvesting is, or should be, a realisation of
those previously recorded profits or losses. <o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="background: white; line-height: 115%; margin-bottom: 6pt; mso-add-space: auto; mso-list: l1 level1 lfo2; text-indent: -18pt;"><!--[if !supportLists]--><span style="color: black; font-family: Symbol; font-size: 14pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Plantation
hardwoods grow four to five times faster than native forest on similar sites. Prima
facie that means native forest timber needs to fetch at least five times what
plantation timber does to achieve a similar return.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="background: white; line-height: 115%; margin-bottom: 6pt; mso-add-space: auto; mso-list: l1 level1 lfo2; text-indent: -18pt;"><!--[if !supportLists]--><span style="color: black; font-family: Symbol; font-size: 14pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">STT
has a composite role as a guardian and protector of native forests, as well as a
business trying to make a sustainable profit and as the godfather of the forest
industry. <o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="background: white; line-height: 115%; margin-bottom: 6pt; mso-add-space: auto; mso-list: l1 level1 lfo2; text-indent: -18pt;"><!--[if !supportLists]--><span style="color: black; font-family: Symbol; font-size: 14pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Funds
will always be needed to look after native forests regardless of whether
logging occurs.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="background: white; line-height: 115%; margin-bottom: 6pt; mso-add-space: auto; mso-list: l1 level1 lfo2; text-indent: -18pt;"><!--[if !supportLists]--><span style="color: black; font-family: Symbol; font-size: 14pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-bidi-font-weight: bold; mso-fareast-font-family: Symbol; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Harvestable
native forest coupes are becoming more remote on less accessible sites leading
to higher harvest and cartage <a style="mso-comment-date: 20231030T2021; mso-comment-parent: 3; mso-comment-reference: JL_4;"></a><a style="mso-comment-date: 20231020T1529; mso-comment-reference: BH_3;"><span style="mso-comment-continuation: 4;">costs</span></a></span><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">. <b><o:p></o:p></b></span></p>
<p class="MsoListParagraphCxSpLast" style="background: white; line-height: 115%; margin-bottom: 6pt; mso-add-space: auto; mso-list: l1 level1 lfo2; text-indent: -18pt;"><!--[if !supportLists]--><span style="color: black; font-family: Symbol; font-size: 14pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-bidi-font-weight: bold; mso-fareast-font-family: Symbol; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Arisings
such as woodchip and peeler logs shouldn’t be allowed to drive native forest
operations as these can be produced much more efficiently from plantations.<b><o:p></o:p></b></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><b><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Less popular forestry facts<o:p></o:p></span></b></p>
<p class="MsoListParagraphCxSpFirst" style="background: white; line-height: 115%; margin-bottom: 6pt; mso-add-space: auto; mso-list: l2 level1 lfo3; text-indent: -18pt;"><!--[if !supportLists]--><span style="color: black; font-family: Symbol; font-size: 14pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-bidi-font-weight: bold; mso-fareast-font-family: Symbol; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Native
forest logging as currently managed by STT is not financially sustainable. If
the costs of regeneration were included when calculating future net proceeds
native forests would have a negative value.<b><o:p></o:p></b></span></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: 115%; mso-list: l2 level1 lfo3; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol; mso-fareast-language: EN-AU;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">As
a corollary, STT would have negative net equity, representing future
contributions required by government to indirectly subsidise a non-market
viable industry.</span><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-language: EN-AU;"><o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: 115%; mso-list: l2 level1 lfo3; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol; mso-fareast-language: EN-AU;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-language: EN-AU;">There is no way
a native forest which grows at somewhere between one and four tonnes per
hectare per year can ever be financially sustainable if only a tiny fraction
ends up fetching premium sawlog prices.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: 115%; mso-list: l2 level1 lfo3; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol; mso-fareast-language: EN-AU;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-language: EN-AU;">Harvesting may
generate cash at harvest time but that doesn’t make it profitable.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="background: white; line-height: 115%; margin-bottom: 6pt; mso-add-space: auto; mso-list: l2 level1 lfo3; text-indent: -18pt;"><!--[if !supportLists]--><span style="color: black; font-family: Symbol; font-size: 14pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-bidi-font-weight: bold; mso-color-alt: windowtext; mso-fareast-font-family: Symbol; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-color-alt: windowtext; mso-fareast-language: EN-AU;">Only 20 per cent of timber harvested from all
Tasmanian forests in 2022/23 came from native forests, almost all from public
forests.</span><b><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;"><o:p></o:p></span></b></p>
<p class="MsoListParagraphCxSpLast" style="line-height: 115%; mso-list: l2 level1 lfo3; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-bidi-font-weight: bold; mso-fareast-font-family: Symbol; mso-fareast-language: EN-AU;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-language: EN-AU;">Twenty per cent
is also a reasonable proxy figure for direct employment in the native forest
industry as a proportion across the overall forest industry.<b><o:p></o:p></b></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><b><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Challenges <o:p></o:p></span></b></p>
<p class="MsoListParagraphCxSpFirst" style="background: white; line-height: 115%; margin-bottom: 6pt; mso-add-space: auto; mso-list: l1 level1 lfo2; text-indent: -18pt;"><!--[if !supportLists]--><span style="color: black; font-family: Symbol; font-size: 14pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-bidi-font-weight: bold; mso-fareast-font-family: Symbol; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">To
refocus on native forests as a perpetual ecosystem rather than as a mere source
for timber. In particular to reinstate the primacy of land and all its associated
values rather than it simply being treated as a growing medium for trees.<b><o:p></o:p></b></span></p>
<p class="MsoListParagraphCxSpMiddle" style="background: white; line-height: 115%; margin-bottom: 6pt; mso-add-space: auto; mso-list: l1 level1 lfo2; text-indent: -18pt;"><!--[if !supportLists]--><span style="color: black; font-family: Symbol; font-size: 14pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">To
determine what amount of human interaction is acceptable in a reimagined forest
system.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpLast" style="background: white; line-height: 115%; margin-bottom: 6pt; mso-add-space: auto; mso-list: l1 level1 lfo2; text-indent: -18pt;"><!--[if !supportLists]--><span style="color: black; font-family: Symbol; font-size: 14pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">To
acknowledge and accept that it is possible for people from different
perspectives with different paradigms to guide their thoughts, to reach the
same conclusion via different routes.<o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><b><span style="color: black; font-family: "Times New Roman",serif; font-size: 16pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Postscript<o:p></o:p></span></b></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Nick O’Malley of The Age wrote a
summary of the Congress </span><span style="color: black; mso-color-alt: windowtext;"><a href="https://www.theage.com.au/environment/conservation/mona-tasmania-david-walsh-logging-australia-20231204-p5eoyf.html">Logging
Tasmania: How Mona’s David Walsh, Kirsha Kaechele brought industry’s most
powerful players together (theage.com.au)</a>.</span><o:p></o:p></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><span style="color: black; font-size: 14pt; line-height: 115%; mso-color-alt: windowtext;">The
BluePrint Institute’s paper on alternate land use options for Tasmanian native
forests can be found</span><span style="color: black; mso-color-alt: windowtext;"> <span style="mso-spacerun: yes;"> </span><a href="https://www.blueprintinstitute.org.au/seeing_the_forest_for_the_trees">Seeing
the forest for the trees: Exploring alternate land use options for the native
forests of Tasmania - Blueprint Institute</a></span><b><span style="color: black; font-family: "Times New Roman",serif; font-size: 16pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;"><o:p></o:p></span></b></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 6pt;"><b><span style="color: black; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 115%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;"><o:p> </o:p></span></b></p>
<div style="mso-element: footnote-list;"><!--[if !supportFootnotes]--><br clear="all" />
<hr align="left" size="1" width="33%" />
<!--[endif]-->
<div id="ftn1" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftnref1" name="_ftn1" style="mso-footnote-id: ftn1;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[1]</span></span><!--[endif]--></span></span></a> Ta
Ann Tasmania P/L is part of the public listed Ta Ann Group publicly headquartered
in Sarawak, Malaysia. It was granted long term contracts for the supply of
peeler logs from native regrowth forests. Veneer mills to process the timber
were built in the Huon in 2007 and in Smithton in 2008. Originally the sliced
veneer was shipped back to Sarawak for plywood manufacture but in 2015 a ply
mill was built in Smithton, mostly funded by a government grant plus proceeds
from the surrender of roughly half the peeler log quota which had been granted
at a peppercorn price. The Huon mill closed following the Jan 2019 bushfires.<o:p></o:p></p>
</div>
<div id="ftn2" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftnref2" name="_ftn2" style="mso-footnote-id: ftn2;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[2]</span></span><!--[endif]--></span></span></a> Feedback
from industry at the Congress was this figure is now closer to 30 per cent. <o:p></o:p></p>
</div>
<div id="ftn3" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftnref3" name="_ftn3" style="mso-footnote-id: ftn3;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[3]</span></span><!--[endif]--></span></span></a>
From 2023 Annual Reports of Sustainable Timber Tasmania P/L and Private Forests
Tasmania.<o:p></o:p></p>
</div>
<div id="ftn4" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftnref4" name="_ftn4" style="mso-footnote-id: ftn4;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[4]</span></span><!--[endif]--></span></span></a>
ibid<o:p></o:p></p>
</div>
<div id="ftn5" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftnref5" name="_ftn5" style="mso-footnote-id: ftn5;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[5]</span></span><!--[endif]--></span></span></a>
STT means Sustainable Timber Tasmania P/L, formerly called Forestry Tasmania
P/L, a Tasmanian Government Business Enterprise (GBE). <o:p></o:p></p>
</div>
<div id="ftn6" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftnref6" name="_ftn6" style="mso-footnote-id: ftn6;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[6]</span></span><!--[endif]--></span></span></a>
Managed Investment Schemes were pooled arrangements whereby investors paid tax
deductible fees to a promoter to acquire a leasehold interest in a little as
one third of a hectare of land to conduct a business of primary production by planting
trees, usually but not exclusively hardwood trees with a short rotation
intended for pulpwood. The upfront fees were a cash flow bonanza for promoters,
which quickly led to over promotion to taxpayers keen to buy tax deductions,
often with finance arranged by promoters. Hubris and greed, poor site selection,
poor growth rates, all led to abysmally poor returns ensuring investors would
quickly lose interest. Which they did along with 95 per cent of their initial
outlays, sweetened only by tax deductions gained from payment of upfront fees.
Following MIS excesses, a new Division 394 of the Tax Assessment Act 1997 was
legislated. This has failed to excite investors and has been largely unused.
Larger investors have preferred a New Forest model where funds are pooled to acquire
and operate forestry businesses. Smaller investors, speculators and tax
minimisers have gone elsewhere.<o:p></o:p></p>
</div>
<div id="ftn7" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftnref7" name="_ftn7" style="mso-footnote-id: ftn7;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[7]</span></span><!--[endif]--></span></span></a>
From 2023 Annual Reports of Sustainable Timber Tasmania P/L and Private Forests
Tasmania<o:p></o:p></p>
</div>
<div id="ftn8" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftnref8" name="_ftn8" style="mso-footnote-id: ftn8;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[8]</span></span><!--[endif]--></span></span></a>
Comprised 10,000 hectares of softwoods and 80,000 hectares of hardwoods. In
addition, 80,000 hectares of native forests were acquired which are held and
managed for non-timber values, plus two woodchip mills, a tree nursery and port
facilities. All assets were acquired from Gunns’ Receivers. New Forests manages
plantation forestry projects on behalf of large investors, often large
superannuation funds. In this case investors’ funds are pooled into the
Tasmanian Forest Fund (TFF), consisting of two sub-trusts plus an operating
company known as Forico Pty Ltd. For convenience’s sake the Group is known as
Forico. TFF was established as a 10-year closed end fund. Early in October
2023, upon expiry of the first 10 years TFF was restructured into a perpetual
fund with three owners with equal shares: <span style="color: #111111; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">UniSuper, an Australian superannuation fund, the Pension Protection Fund
from the UK and APG Asset Management from the Netherlands.</span><span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><o:p></o:p></span></p>
</div>
<div id="ftn9" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftnref9" name="_ftn9" style="mso-footnote-id: ftn9;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[9]</span></span><!--[endif]--></span></span></a>
Reliance Forest Fibre is a Group which comprises Reliance Forest Fibre P/L and
the Reliance Forest Fibre Trust. It is structured like Forico. Unlike Forico
the ownership is murkier, with the last published accounts revealing the
group’s ultimate owner is a company resident in the Cayman Islands.<o:p></o:p></p>
</div>
<div id="ftn10" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftnref10" name="_ftn10" style="mso-footnote-id: ftn10;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[10]</span></span><!--[endif]--></span></span></a>
Gunns Ltd was an ASX listed company, originally a sawmiller of native forest
timber, became a woodchipper of renown, a plantation grower, a MIS promoter,
and a pulp mill aspirant. At one stage it was the largest timber business in
the country with integrated operations in both softwoods and native forests. It
collapsed in 2012.<o:p></o:p></p>
</div>
<div id="ftn11" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftnref11" name="_ftn11" style="mso-footnote-id: ftn11;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[11]</span></span><!--[endif]--></span></span></a>
FEA or Forest Enterprises Australia P/L, a former ASX listed company. The first
prominent Tasmanian MIS promoter it was overtaken by Gunns to end up as
Tasmania’s second largest MIS company. It collapsed in 2010. Trying desperately
to survive by belatedly developing an integrated business it built the Bell Bay
sawmill before collapsing. This mill was then acquired by Gunns. After Gunns’
demise the mill was snapped up by Timberlink P/L and now appears to be an
extremely profitable monopoly softwood sawmill operation in the New Forests’
stable.<o:p></o:p></p>
</div>
<div id="ftn12" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftnref12" name="_ftn12" style="mso-footnote-id: ftn12;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[12]</span></span><!--[endif]--></span></span></a>
The TFA is the Tasmanian Forest Agreement, the TCFA is the Tasmanian Community
Forests Agreement. The other two major Federal -State agreements to assist
restructure of the Tasmanian forest industry have been the Helsham agreement
following the 1987 Helsham inquiry plus the 2011 Tasmanian Forest
Intergovernmental Agreement (IGA).<o:p></o:p></p>
</div>
<div id="ftn13" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftnref13" name="_ftn13" style="mso-footnote-id: ftn13;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[13]</span></span><!--[endif]--></span></span></a>
This marked the beginning of Reliance’s operation. It subsequently purchased a
wood chip mill at Bell Bay (from Smart fibre). Reliance then acquired the
former FEA plantations plus some native forests managed for non-timber values
from Resource Management in 2019/20. Reliance currently has a portfolio of
49,200 hectares of hardwood plantations plus 16,400 hectares of native forests
so far spared from forest operations.<o:p></o:p></p>
</div>
<div id="ftn14" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftnref14" name="_ftn14" style="mso-footnote-id: ftn14;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[14]</span></span><!--[endif]--></span></span></a> ANZFF
acquired the plantations in 2011/12. ANZFF, the Australia New Zealand Forest
Fund, pools investors’ funds in a manner similar to TFF/Forico. New Forests
manages ANZFF. ANZFF also owns Timberlink P/L, a softwood sawmiller.<o:p></o:p></p>
</div>
<div id="ftn15" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftnref15" name="_ftn15" style="mso-footnote-id: ftn15;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[15]</span></span><!--[endif]--></span></span></a>
One tonne refers to one green metric tonne and is roughly equal to one cubic metre
of timber.<o:p></o:p></p>
</div>
<div id="ftn16" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftnref16" name="_ftn16" style="mso-footnote-id: ftn16;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[16]</span></span><!--[endif]--></span></span></a> In
the case of native forest harvesting, STT discloses areas of clearfell
harvesting and areas of partial or selective harvesting. The latter are assumed
to be 50 per cent clearfelled in volume terms to derive a clearfell equivalent
area to enable a comparison with plantation operations.<o:p></o:p></p>
</div>
<div id="ftn17" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftnref17" name="_ftn17" style="mso-footnote-id: ftn17;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[17]</span></span><!--[endif]--></span></span></a> Trees
are usually sold either on a stumpage or a mill door delivered basis. In the
latter case the seller arranges and pays for harvest and cartage to a
processing facility. In the former case the purchaser acquires standing timber and
is responsible for harvesting and cartage.<o:p></o:p></p>
</div>
<div id="ftn18" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftnref18" name="_ftn18" style="mso-footnote-id: ftn18;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[18]</span></span><!--[endif]--></span></span></a>
Timberlink P/L is owned by ANZFF the owner of the 50,000-hectare softwood
plantation on public land. It acquired sawmill assets from Gunns’ Receiver in
2014 including the Bell Bay sawmill originally built by FEA, plus another large
softwood sawmill in Tarpeena, South Australia. The was added to ANZFF’s
existing softwood plantation assets acquired from Gunns when after shortly
taking over listed company Auspine in 2008 mainly<span style="mso-spacerun: yes;"> </span>by a share issue rather than cash, it<span style="mso-spacerun: yes;"> </span>sold most of the assets at a considerable
loss to raise cash to enable it to keep alive its ill-fated dream to build a
pulp mill.<o:p></o:p></p>
</div>
<div id="ftn19" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftnref19" name="_ftn19" style="mso-footnote-id: ftn19;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[19]</span></span><!--[endif]--></span></span></a>
Norske Skog is a Norwegian based paper company. Tasmanian operations are located
at Boyer in the Derwent Valley. It manufactures newsprint and magazine grade
paper.<o:p></o:p></p>
</div>
<div id="ftn20" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftnref20" name="_ftn20" style="mso-footnote-id: ftn20;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[20]</span></span><!--[endif]--></span></span></a>
Sawlogs includes high quality sawlogs, Cat 2 & 8 sawlogs and logs for posts
and poles. Peelers includes domestic and export logs. Special includes
blackwood, huon pine, sassafras and other craftwood species. Woodchips also
include the small amounts of firewood, bark and other residues.<o:p></o:p></p>
</div>
<div id="ftn21" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftnref21" name="_ftn21" style="mso-footnote-id: ftn21;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[21]</span></span><!--[endif]--></span></span></a>
Headline profit means net profit after tax.<o:p></o:p></p>
</div>
<div id="ftn22" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftnref22" name="_ftn22" style="mso-footnote-id: ftn22;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[22]</span></span><!--[endif]--></span></span></a>
Cash earnings means headline profits before interest tax and non- cash items
like depreciation and in STT’s case movement in the value of its forests. Often
called EBITDA (Earnings before interest tax depreciation and amortisation). It
excludes capital outlays.<o:p></o:p></p>
</div>
<div id="ftn23" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftnref23" name="_ftn23" style="mso-footnote-id: ftn23;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[23]</span></span><!--[endif]--></span></span></a>
STT’s 2022/23 Annual Report admitted to errors in the way it had valued its
forest estate since 2010. From 2010 to 2022 STT valued its forest estate on the
basis of future net harvest proceeds but then split that value between trees
and roads. From 2015 what was described a make good asset, being the costs to
regenerate/replant felled forests was also assigned part of the forest. Land
was given a zero value. In 22/23 it was decided to attribute all of the value
of the forest estate to trees and to value land and roads on an historical cost
basis less any depreciation if applicable. The make good asset was removed and
is now treated in the same manner as say a leave provision.<o:p></o:p></p>
</div>
<div id="ftn24" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftnref24" name="_ftn24" style="mso-footnote-id: ftn24;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[24]</span></span><!--[endif]--></span></span></a> A
detailed analysis of STT’s valuation methodology can be found at <a href="https://tasfintalk.blogspot.com/2023/08/stts-forest-valuation-charade.html">Tasfintalk:
STT's forest valuation charade</a><span class="MsoHyperlink">, </span>written
before the release of the 2022/23 Annual report which outlined minor changes to
valuation methods.. For details about the changes see <a href="http://tasfintalk.blogspot.com/2023/11/stt-admits-accounting-errors.html">Tasfintalk:
STT admits accounting errors</a>.<o:p></o:p></p>
</div>
<div id="ftn25" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftnref25" name="_ftn25" style="mso-footnote-id: ftn25;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[25]</span></span><!--[endif]--></span></span></a> The
Forestry Corporation of NSW manages a hardwood estate of comparable size to STT
with approximately 1.8 million hectares of multiple-use native forest and
34,000 hectares of hardwood plantations. Hardwood assets have been fully
impaired, and the tree crop value is not recognised in the financial
statements. Other related assets, except for land, are also fully impaired. The
only trees recognised with value is FC’s much larger softwood plantation
estate. <o:p></o:p></p>
</div>
<div id="ftn26" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftnref26" name="_ftn26" style="mso-footnote-id: ftn26;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[26]</span></span><!--[endif]--></span></span></a>Australian
Carbon Credit Units issued by the Clean Energy Regulator for eligible
greenhouse gas abatement measures. ACCUs are tradable assets. <a name="_Hlk149980914"><span style="mso-spacerun: yes;"> </span><o:p></o:p></a></p>
</div>
<div id="ftn27" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231210%20mona%20forestry%20paper.docx#_ftnref27" name="_ftn27" style="mso-footnote-id: ftn27;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[27]</span></span><!--[endif]--></span></span></a>
Tragedy of the commons is an economic phenomenon popularised by a 1968 essay
with that title by ecologist Garrett Hardin.</p></div></div><div style="mso-element: comment-list;">
<!--[endif]-->
<div style="mso-element: comment;"><!--[if !supportAnnotations]-->
<div class="msocomtxt" id="_com_1" language="JavaScript"><!--[endif]--><span style="mso-comment-author: "Bryan Hayes"; mso-comment-providerid: AD; mso-comment-userid: S-1-5-21-4102948123-2798445075-297641547-1215;"><!--[if !supportAnnotations]--><a name="_msocom_1"></a><!--[endif]--></span>
<p class="MsoCommentText"><br /></p></div></div><div style="mso-element: comment;"><div class="msocomtxt" id="_com_4" language="JavaScript">
<!--[if !supportAnnotations]--></div>
<!--[endif]--></div>
</div>tasfintalkhttp://www.blogger.com/profile/04012719835733649162noreply@blogger.com2tag:blogger.com,1999:blog-4314112685994399920.post-55324430382516934442023-11-24T14:24:00.005+11:002023-11-25T06:27:21.074+11:00Vic Forests: The aftermath<p> </p><p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="background: white; color: #333333; font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Vic Forests’
disaster brings to mind the familiar Hemingway quote: “How did you go
bankrupt?" <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="background: white; color: #333333; font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">“Two ways.
Gradually, then suddenly.”</span><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The 2021/22 bottom line of $54 million was
followed by a $61 million loss in 2022/23, according to Vic Forests’ recently
tabled Annual Report.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">However a close reading of the financials
reveals the picture was far worse.<span></span></span></p><a name='more'></a><o:p></o:p><p></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Grants from the Victorian government to meet
compensation payments, to customers for non-supply and to contractors for being
sidelined, were included as revenue thereby making the picture look vastly
better.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Government funds to Vic Forest comprised three
main groups:<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpFirst" style="line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 150%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Operating grants
for plantation and nursery establishment, grants to cover the costs of
non-commercial activities, revenue from sales of goods and services to other State
government entities.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 150%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Grants to cover compensation
payments.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpLast" style="line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 150%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Loans.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">To see the real extent of the cost to
Victorian taxpayers a little re-working of the profit and loss statements are required.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">This is the restated P&L before and after
compensation payments:<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><o:p> </o:p></span></p>
<table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; mso-padding-alt: 0cm 5.4pt 0cm 5.4pt; mso-yfti-tbllook: 1184; width: 485px;">
<tbody><tr style="height: 15.75pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><b><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Vic Forests P&L
Statement<span style="mso-spacerun: yes;"> </span>$m<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67"></td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 1;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="center" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2022/23<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67">
<p align="center" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2021/22<o:p></o:p></span></b></p>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 2;">
<td style="height: 15.75pt; padding: 0cm 5.4pt; width: 255pt;" width="340">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><b><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Revenue<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67"></td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 3;">
<td style="height: 15.75pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 12pt;"><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Sale of forest products<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">17.9 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">88.4 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 4;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 12pt;"><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Other income from Vic Government<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">15.2 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">19.0 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 5;">
<td style="height: 15.75pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 12pt;"><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Other income third parties<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">2.1 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">0.2 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 16.5pt; mso-yfti-irow: 6;">
<td nowrap="" style="height: 16.5pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340"></td>
<td nowrap="" style="height: 16.5pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">35.2 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 16.5pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">107.6 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 16.5pt; mso-yfti-irow: 7;">
<td nowrap="" style="height: 16.5pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340"></td>
<td nowrap="" style="height: 16.5pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79"></td>
<td nowrap="" style="height: 16.5pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67"></td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 8;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><b><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Expenses<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67"></td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 9;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 12pt;"><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Harvest cartage & other production exp<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">19.2 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">71.7 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 10;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 12pt;"><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Employee benefits expenses<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">21.5 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">20.3 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 11;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 12pt;"><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Roading expenses<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">7.3 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">6.4 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 12;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 12pt;"><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Regeneration expenses<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">3.2 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">3.2 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 16.5pt; mso-yfti-irow: 13;">
<td nowrap="" style="height: 16.5pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 12pt;"><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Amortisation and depreciation expenses<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 16.5pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">4.1 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 16.5pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">9.9 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 16.5pt; mso-yfti-irow: 14;">
<td nowrap="" style="height: 16.5pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 12pt;"><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Legal expenses<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 16.5pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">5.0 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 16.5pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">10.5 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 14.25pt; mso-yfti-irow: 15;">
<td style="height: 14.25pt; padding: 0cm 5.4pt; width: 255pt;" width="340">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 12pt;"><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Other operating expenses<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 14.25pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">11.2 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 14.25pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">11.1 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18pt; mso-yfti-irow: 16;">
<td nowrap="" style="height: 18pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340"></td>
<td nowrap="" style="height: 18pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">71.4 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">133.1 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 17;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67"></td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 18;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><b><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Operating loss before
compensation payments<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: red; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">-36.2 </span><span style="color: black; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: red; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">-25.6 </span><span style="color: black; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 19;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67"></td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 20;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Compensation payments<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">150.3 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">13.6 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 16.5pt; mso-yfti-irow: 21;">
<td nowrap="" style="height: 16.5pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340"></td>
<td nowrap="" style="height: 16.5pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79"></td>
<td nowrap="" style="height: 16.5pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67"></td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 22; mso-yfti-lastrow: yes;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><b><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Net loss after compensation
payments<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: red; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">-186.5 </span><span style="color: black; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: red; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">-39.2 </span><span style="color: black; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
</tr>
</tbody></table>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The loss before compensation payments in 2022/23
was $36.2 million (21/22 loss $25.6 million).<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">As can be seen this includes operating revenue
from the Victorian government of $15.2 million ($19.0 million in 2022/23). The breakup
of these amounts is:<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><o:p> </o:p></span></p>
<table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; mso-padding-alt: 0cm 5.4pt 0cm 5.4pt; mso-yfti-tbllook: 1184; width: 485px;">
<tbody><tr style="height: 15.75pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="center" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2022/23<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67">
<p align="center" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2021/22<o:p></o:p></span></b></p>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 1;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><b><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Other income from Vic
Government<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67"></td>
</tr>
<tr style="height: 19.5pt; mso-yfti-irow: 2;">
<td nowrap="" style="height: 19.5pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Plantation
and establishment grants<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 19.5pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">0.9 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 19.5pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2.0 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 3;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Grants
for non-commercial services<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">10.5 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">12.6 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 20.25pt; mso-yfti-irow: 4;">
<td nowrap="" style="height: 20.25pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Other
income for goods and services<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 20.25pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">3.8 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 20.25pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">4.4 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 5; mso-yfti-lastrow: yes;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">15.2 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">19.0 <o:p></o:p></span></p>
</td>
</tr>
</tbody></table>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">After compensation payments of $150.3 in
2022/23 ($13.6 million in 2021/22) the loss in 2022/23 was $186.5 million ($39.2
million in 2021/22).<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">However even these amounts don’t tell the full
story. There is further compensation of $55.6 million expected to be paid.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The operating losses needed to be financed and
that required more funds from the Victorian Governments this time via loans.
Total government assistance to Vic Forests over the two years 2021/22 and
2022/23 is best shown in the following table:<o:p></o:p></span></p>
<table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; mso-padding-alt: 0cm 5.4pt 0cm 5.4pt; mso-yfti-tbllook: 1184; width: 485px;">
<tbody><tr style="height: 15.75pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><b><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;"><br /></span></b></p><p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><b><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Funds from Vic government $m<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67"></td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 1;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="center" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2022/23<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67">
<p align="center" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; font-size: 12pt; line-height: 150%; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2021/22<o:p></o:p></span></b></p>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 2;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67"></td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 3;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 12pt;"><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Grants for compensation payments<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">149.0 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">6.3 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 4;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 12pt;"><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Loans<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">20.0 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">32.8 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 16.5pt; mso-yfti-irow: 5;">
<td nowrap="" style="height: 16.5pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340"></td>
<td nowrap="" style="height: 16.5pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79"></td>
<td nowrap="" style="height: 16.5pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67"></td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 6;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Total for 21/22 & 22/23<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">169.0 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">39.1 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 7;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67"></td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 8;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 12pt;"><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Plus estimated future compensation <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">55.6 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 9;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67"></td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 10; mso-yfti-lastrow: yes;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 255pt;" valign="bottom" width="340">
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><b><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">Total bailout funds from Vic
Govt<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 59pt;" valign="bottom" width="79"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 50pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; text-align: right;"><span face=""Arial",sans-serif" style="color: black; font-size: 12pt; line-height: 150%; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">263.7 <o:p></o:p></span></p>
</td>
</tr>
</tbody></table>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">In two years Vic Forests cost Victorian
taxpayers $263.7 million yet was still able to say it </span><span style="font-size: 14pt; line-height: 150%;">“<i>is proud to be recognised as a
credible, successful, and dynamic native forestry business that provides a
sustainable contribution to Victoria.</i>”<a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231124%20Vic%20Forests%20aftermath.docx#_ftn1" name="_ftnref1" style="mso-footnote-id: ftn1;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[1]</span></span><!--[endif]--></span></span></a></span><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;"><o:p> </o:p></span></p>
<div style="mso-element: footnote-list;"><!--[if !supportFootnotes]--><br clear="all" />
<hr align="left" size="1" width="33%" />
<!--[endif]-->
<div id="ftn1" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="https://d.docs.live.net/57fb5a2abdf1270c/Documents/articles/231124%20Vic%20Forests%20aftermath.docx#_ftnref1" name="_ftn1" style="mso-footnote-id: ftn1;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[1]</span></span><!--[endif]--></span></span></a>
Vic Forests Annual Report 2022/23 page 6.<o:p></o:p></p>
</div>
</div>tasfintalkhttp://www.blogger.com/profile/04012719835733649162noreply@blogger.com0tag:blogger.com,1999:blog-4314112685994399920.post-17170510503536248232023-11-05T14:23:00.039+11:002023-11-06T10:24:46.291+11:00STT admits accounting errors<p> </p><p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">This note is an addendum to the blog
<a href="http://tasfintalk.blogspot.com/2023/08/stts-forest-valuation-charade.html">STT's forest valuation charade</a> following the release of STT’s Annual Report for
2022/23 on 31<sup>st</sup> October 2023.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">STT has admitted making errors with its
financial statement since 2010. It has restated prior year financials and
provided an extensive note.<span></span></span></p><a name='more'></a><o:p></o:p><p></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">STT’s net equity essentially
comprises the value of its forest estate. There aren’t many other assets or
liabilities. How forests are valued is therefore very significant. The 2022/23
Annual Report acknowledged the error of its past ways and changed the valuation
methodology. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">Although STT’s forest estate is now worth
more with the 2022 forest value restated by approximately $24 million, the change in
accounting methods confirms STT’s pragmatic approach to accounts preparation.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">Since 2010 STT has valued the forest
estate as one cash generating unit before splitting the value between the three
components: land, roads and trees. From 2016 onward a fourth was added, a make
good asset being the cost of replanting/regenerating felled forests.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">The latest Annual Report shows STT
valuing the forest estate in the same way, by discounting future expected net
harvest proceeds, but then allocating all the value to trees.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">How then are the other three
components treated?<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><b><span style="font-size: 14pt; line-height: 150%;">Land<o:p></o:p></span></b></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">Between 2010 and 2022 STT gave forest
land a zero value. Most of STT’s forest estate is on Crown land but there is
some in STT’s name, which now appears in STT’s financials at historical cost, $
11 million at 30<sup>th</sup> June 2023. Land previously written off has made a
return to the balance sheet. This has meant retained earnings are also
increased. The bulk of forest land which STT manages is Crown land which is
given a zero value, ostensibly because STT doesn’t own it. That didn’t prevent Crown
land having a value in STT’s books before 2010.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><b><span style="font-size: 14pt; line-height: 150%;">Roads<o:p></o:p></span></b></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">STT has now reverted to its pre 2016
practice of valuing roads as a separate item of property, plant and equipment,
on an historical cost basis, but with a much higher rate of depreciation. The
written down value of roads at 30<sup>th</sup> June 2023 was $13 million. This
also increased STT’s retained earnings and hence its net equity.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><b><span style="font-size: 14pt; line-height: 150%;">Make good asset<o:p></o:p></span></b></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">This has been removed from the
financials. By not allocating a portion of the forest estate to the make good
asset has meant the value of trees increases. But there hasn’t been a
corresponding increase in retained earnings/ equity because prior years’
earnings have been adjusted. by immediately expensing the make good amounts in those
years, rather than capitalising them. This has meant retained earnings have been
adjusted downwards. Tree values increased on one hand, increasing retained
earnings, which were then offset by a similar amount representing the immediate
expensing of make good amounts. The balance of yet to be spent amounts is still
recorded as a liability, as a reestablishment provision. The peculiar concept
of treating unspent regeneration expenses as an</span><span style="font-size: 14pt;"> asset has thankfully
been banished from STT’s books. It is now being expensed when incurred as one
would expect a mandated expense be treated. No different to a leave provision,
say.</span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><b><span style="font-size: 14pt; line-height: 150%;">Effects of the accounting changes<o:p></o:p></span></b></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">Attributing a value for land and
roads as described, rather than allocating a portion of the forest estate has
meant the value of trees is $24 million higher than it was previously. STT’s
retained earnings and hence its equity position is accordingly $24 million
higher.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">Expensing the costs of regeneration
is a meaningful change. The next logical step is to include these costs (and
the costs of roads) when valuing future net market proceeds and hence the value
of STT forest estate, which accounts for almost all STT’s equity at any point
in time. <span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">How can it be that a cost of
maintaining a perpetual asset isn’t included in the calculation of net harvest
proceeds needed to value a forest?? If done so there is little doubt the timber
value of forest would be negative. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">A glimmer of hope for a revised
balance sheet for STT was the inclusion for the first time of $299k worth of
ACCUs as an asset, additional income earned during the 2022/23 year. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">But who owns the underlying land that
makes STT able to earn ACCUs from the Clean Energy Regulator for undertaking
greenhouse gas abatement measures? Is it STT’s land or Crown land which STT
considers has nil value.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">STT used to justify the non-inclusion
of notional rents for forested land when calculating future net harvest
proceeds by saying it wasn’t necessary because land would be allocated a portion
of the forest estate once valued. But then it allocated a nil value to that
land, not only to land it owned but to Crown land growing STT’s forests.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14pt; line-height: 150%;">Reality has intervened and STT now
records a value for the land it owns. What then for all the other land? Does it
not have a value? How much longer is STT going to persist with the notion that
as far as possible land will be recorded as having no value so that when
harvesting occurs any non-timber losses attributable to the land and its
associated values can be ignored.<o:p></o:p></span></p>tasfintalkhttp://www.blogger.com/profile/04012719835733649162noreply@blogger.com2tag:blogger.com,1999:blog-4314112685994399920.post-79351870928783461142023-10-09T19:44:00.007+11:002023-10-24T11:43:29.500+11:00Macquarie Point Stadium: Gold Mine or Fools Gold?<p><i><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 150%;">(Co-written with </span></i><i><span lang="EN" style="color: #232323; font-family: "Times New Roman",serif; font-size: 14pt; line-height: 150%; mso-ansi-language: EN; mso-fareast-language: EN-AU;">Graeme Wells, Adjunct
Senior Researcher at the University of Tasmania).</span></i></p>
<p class="MsoNormal" style="line-height: 150%;"><span style="font-family: "Times New Roman",serif; font-size: 14.0pt; line-height: 150%;">The public discussion re
the proposed AFL stadium at Macquarie Point has become a bit of a shouting
match where the pro and cons of an AFL side and the manoeuvrings of politicians
and AFL managers have taken centre stage. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%;"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 150%;"><span style="font-size: 14pt;">In our view it is
important we don’t lose sight of the fundamentals which must underpin sensible
public policy. It is for this reason we have chosen to comment on a recent study given prominence in the media which essentially
ridiculed expert reports about the economic case for the stadium.</span></span></p><p class="MsoNormal" style="line-height: 150%;"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 150%;">Mr Hanson’s recent
contribution to the economic case for the proposed AFL stadium has received
extensive coverage in the Mercury. It has been described as uncovering a gold
mine for Tasmania. He claims to identify deficiencies in the expert analysis
provided to the government. Unfortunately, his creative adjustments to the
government business case, which included a benefit cost analysis (BCA), are
misleading and based on a misunderstanding of BCAs. This article is intended to
correct the record.<span></span></span></p><a name='more'></a><o:p></o:p><p></p>
<p class="MsoNormal" style="line-height: 150%;"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 150%;">The government’s most
recent Fiscal Strategy includes a welcome development – that infrastructure
investments must return a benefit-cost ratio greater than one. If, as our
analysis shows, the benefit – cost ratio is much less than one, the Stadium
project falls at the first hurdle.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%;"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 150%;">The whole point of a BCA
is to assess whether the stadium is a socially desirable investment. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%;"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 150%;">Tasmanian government policy
requires major infrastructure investments have a benefit-cost ratio greater
than one. In other words, benefits need to exceed costs. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%;"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 150%;">The BCA undertaken by MI
Global forecasts a ratio of just 0.5. One dollar of benefit for every two
dollars spent. The expert analysis by MI Global also conducted sensitivity
analysis to test the robustness of its conclusion. In the best-case scenario,
with construction costs twenty percent lower and visitation benefits twenty
percent higher the benefit-cost ratio, if both favourable cases apply, was, at
0.73, still less than one. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%;"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 150%;">A BCA looks at what
benefits result from the outlays regardless of how a project is financed. The
question of how to finance a project producing net benefits is a separate
issue. It is misleading to conflate the two and conclude that if someone else
finances part of the deal, an otherwise dud project gets the thumbs up. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%;"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 150%;">In assessing a project
from society’s point of view, a BCA values resources at their opportunity cost.
How could the resources used to build the stadium have been used elsewhere? Mr
Hanson is untroubled by possible alternative uses for resources. He might
believe there is no economic return from health spending compared to returns
from a stadium from Day 1, but fortunately few others do. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%;"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 150%;">Opportunity cost is often
easy to measure. The cost of a plumber building the stadium, for example, is
just the wage she could have earned on an alternative building site. Similarly
for all the other inputs into the construction. For the BCA report, the
opportunity cost of Tasmanian resources used to build the stadium was $750m.
This opportunity cost is incurred regardless of how the stadium is financed.
That the federal government is to contribute $240m to the Macquarie Point
precinct has no bearing on the opportunity costs of the resources employed to
build the stadium. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%;"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 150%;"><span style="mso-spacerun: yes;"> </span>If the federal Treasury guidelines had been
followed, the opportunity cost of the stadium’s 5.6 hectares of land would also
have been included. Macquarie point is valuable land. From society’s
perspective it is not free. To ignore this opportunity cost in a benefit-cost
analysis, together with Mr Hanson’s discount to the $750m construction cost,
means that his version of costs is understated by a wide margin. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%;"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 150%;">The project should be
precisely defined. The government business case is focussed on the stadium and
the ongoing costs and benefits directly associated with it. The Hanson report
takes a different tack. It includes, as benefits, estimates of the AFL’s annual
base funding (on a similar basis to existing AFL teams) and, apparently,
spending by the players and other AFL employees living in Tasmania. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%;"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 150%;">These claims are not
directly relevant to a BCA for the stadium. If they were, offsetting costs
should also be counted. These include the $60m construction cost of the
training facility, the opportunity cost of the land on which it is based, and
the annual $12m commitment by the government to support the new club. Again,
the Hanson report understates the costs.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%;"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 150%;">One of the flaws of the
BCA was the assumption that projected occupancy of almost one major event per
fortnight (10,000 people or more) would be achieved in the first year. Mr
Hanson was happy to accept this absurdity because it suited his predetermined
case.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%;"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 150%;">Finally, both the
government BCA and the Hanson report ignore the penalties for late completion
of the stadium, and if AFL attendance falls below target levels. It is
difficult to assess the likelihood of these clauses being activated. But it is
standard practice in long term contracts to consider these as potential
costs. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%;"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 150%;"> The Hanson report
finishes with an expanded list of possible events to add to the government
business case. In my youth I liked the rock band entitled Weddings, Parties,
Anything. This would also be a good title for Mr Hanson’s speculative list. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%;"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 150%;">It is often claimed that
if resources used on the stadium were reallocated to the health budget, it
would yield ‘no economic return’ (Hanson, p.5). A 2021 report by Wells Economic
Analysis calculated the private cost of elective surgery waiting lists in
Tasmania to be $120m per annum. It would be easy to list many other examples of
economic benefits from even marginal increases in health spending.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%;"><span style="font-family: "Times New Roman",serif; font-size: 14pt; line-height: 150%;">As the economist Keynes
famously remarked, digging holes and paying people to refill them has a
significant impact on economic activity and employment. But we are in an
economy with a shortage of qualified tradespeople, not to mention vacant
inner-city land. Surely there are more socially desirable investments
available. That’s why a BCA is so important. When analysed using
consistent principles, the stadium has a benefit-cost ratio significantly less
than one. So, while some have described the stadium as a gold mine, a
benefit-cost ratio significantly less than one suggests it’s fool’s
gold. <o:p></o:p></span></p>tasfintalkhttp://www.blogger.com/profile/04012719835733649162noreply@blogger.com6tag:blogger.com,1999:blog-4314112685994399920.post-78667189422303779602023-08-21T16:19:00.052+10:002023-11-25T08:04:24.182+11:00STT's forest valuation charade<p> </p><p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">Publicly
owned commercial native forests as operated by Sustainable Timber Tasmania P/L
(STT) are perpetual assets managed for the benefit of future generations. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">Yet when STT
values its forests every year it values the estate as a single rotation crop.
Which is a patently absurd assumption for a perpetual asset where replanting is
mandatory.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">This is the
loophole that allows STT to pretend to be sustainable. Replanting costs are
excluded when determining the expected net proceeds which forms the basis for a
forest’s value.<span></span></span></p><a name='more'></a><o:p></o:p><p></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">Valuation of
forests is covered by accounting standard AASB 141 Agriculture. Trees are
included by virtue of them being biological assets which produce timber (an
agricultural product). Para 4 lists examples of biological assets to which the
standard applies. Plantation forests are one example. Native forests are not specifically
listed as an example, but it is clear native forest trees are biological assets
and STT is a for-profit business, hence AASB 141 applies. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">Everyone,
virtually without exception recognises the value of native forests are far
greater value than mere timber values. There are many others – biodiversity,
carbon storage, water management, climate mitigation, nutrient recycling, and
erosion control. To date valuers, while acknowledging these values have made
little progress in including these values when assessing the sustainability of
a native forest. In the case of STT, it is given a convenient leave pass on
this issue because its mandate as per the Forest Management Act 2013 doesn’t
specifically require it to have regard to other forest values. Its statutory
role is essentially to supply minimum quantities of timber as specified in the
Regulations. Any other non-timber losses are considered sunk costs, costs that don’t
need to be taken into account when assessing the profit or losses from forest
operations.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">A valuer
starts with the premise a forest estate comprises three components land,
improvements such as roads, and trees. For accounting purposes, they are three
separate assets, but only trees are biological assets. Land and land
improvements both fall into the category Property Plant and Equipment.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">Changes in
the value of biological assets are brought to account in the profit and loss
statement. That’s why the way forests are valued has a huge bearing as to
whether an entity makes a profit or loss from forest operations. An entity
might spend more on its forest estate, to plant more trees say, but it’s the movements
in the value of a forest over a year apart from the additional spending, which
determines the amount that impacts the P&L statement.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">Roads are
treated as items of plant. Any spending adds to the balance sheet Depreciation
each year reduces the balance and becomes an expense in the P&L.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">Land is also
a balance sheet item. However it is not depreciated.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">The
accounting treatment of land and roads are governed by different accounting
standards. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">Both roads
and trees are obviously attached to the underlying land. It is very difficult,
indeed impossible, to value the three components separately when combined they constitute
a perpetual native forest. There’s little or no market information for the
assets separately. Hence the accepted valuation approach to derive a fair value
for biological assets is to value the forest estate as one before deducting a
fair value for land and roads.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">The only
recognised approach to establishing a fair value for a forest estate is to determine
the net proceeds from the forest and convert them into a lump sum amount in
current dollars.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">When STT
assesses which costs to include when valuing native forests it uses a loose
interpretation of AASB 141 para 25 which says:<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: 36pt;"><i><span style="background: white; color: black; font-size: 14pt; line-height: 107%;">An entity does not include any
cash flows for financing the assets, taxation, <span style="background: yellow; mso-highlight: yellow;">or re-establishing biological assets after harvest (for
example, the cost of replanting trees in a plantation forest after harvest)</span><b>.</b></span></i><i><span style="font-size: 14pt; line-height: 107%;"><o:p></o:p></span></i></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">The para
specifically mentions a plantation forest, a crop in other words. <span style="mso-spacerun: yes;"> </span>But STT takes that to cover native forests as
well. A long bow one would suggest. If that was the intent the word ‘plantation’
wouldn’t have been included. AASB 141 covers all biological assets, of which
crops are only a subset. The value of a crop is determined without having to
bother with what happens after harvest. There are lots of crops that span more
than a year and are followed by a completely different crop. It is not unreasonable
to use the same rules for valuing a tree plantation as applies to all crops.
What happens post-harvest shouldn’t be a consideration. That is not to say post-harvest
costs shouldn’t be recorded, only they needn’t be considered when valuing a
crop. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">But a native
forest isn’t simply a crop, it’s a perpetual ecosystem. <span style="mso-spacerun: yes;"> </span>After ignoring most of the values which
comprise such an ecosystem, the valuer settles on a narrow view of a forest
estate comprising land, roads and trees before proceeding. But at least the valuer’s
underlying assumption is that a forest estate is a perpetual asset. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">This
pre-empts the question as to what period of time needs to be considered when
valuing a native forest. Foresters and valuers have pondered this question, and
to remove any doubts have issued guidelines <a href="file:///C:/Users/John%20&amp;%20Julie/Documents/articles/230821%20forest%20valuation%20charade.docx#_ftn1" name="_ftnref1" style="mso-footnote-id: ftn1;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[1]</span></span><!--[endif]--></span></span></a>
discussing what to include over what period. They have said a valuation: <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: 36pt;"><i><span style="font-size: 14pt; line-height: 107%;">“……should use the expected net cash flows over the specified
planning horizon (<span style="background: yellow; mso-highlight: yellow;">generally
not less than a full rotation and the transition to the next in the case of a
sustainable going concern</span>).” <o:p></o:p></span></i></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">In the case
of a sustainable going concern net harvest proceeds <b>should include</b> the
costs to transition to the next rotation. That must include replanting.
Logically it should as it’s a cost of maintaining a perpetual forest. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">When
discussing what discount rate to use to convert future cash flows to a present
value the following appears:<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: 36pt;"><i><span style="font-size: 14pt; line-height: 107%;">“The choice of discount rate has traditionally been one of
the most controversial elements in <span style="background: yellow; mso-highlight: yellow;">the valuation of forest estates and plantation estates.</span>”<o:p></o:p></span></i></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">Note the
phrase <span style="background: yellow; mso-highlight: yellow;">forest estates and
plantation estates</span>. Professional foresters and valuers distinguish
between the two. STT doesn’t.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">Just to
pause for a moment to review the above. The way forests are valued is to value
them as one, and then split the total value among the 3x components, land,
roads and trees (biological assets). The matter we’ve addressed thus far is what
expenses should be included in determining net proceeds from a native forest
which then forms the basis for assessing its value. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">Arguably
replanting cost should be included.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">The issue that
now arises is should road costs and a return on the land itself be included. STT’s
Notes to financial statements are skimpier each year. Annual Reports
before<span style="mso-spacerun: yes;"> </span>Forestry Tasmania renamed itself
to STT in 2018/19 are no longer available on line. In 2014/15 the extensive
note covering the valuation of the forest estate<a href="file:///C:/Users/John%20&amp;%20Julie/Documents/articles/230821%20forest%20valuation%20charade.docx#_ftn2" name="_ftnref2" style="mso-footnote-id: ftn2;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[2]</span></span><!--[endif]--></span></span></a>
said:<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: 36pt;"><i><span style="font-size: 14pt; line-height: 107%;">“…… an imputed land rental charge is not included on the
basis that the land value recognised in the Statement of Financial Position is
deducted from the valuation and recorded separately.”<o:p></o:p></span></i></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">The only
trouble is land is given a zero value. Only trees and roads have value
according to STT. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">There’s a
touch of convenient circularity to the proposition that imputed land rents aren’t
included because land is given a separate value, which we later find out to be
zero.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">The latest STT
Annual Report (2022) is much briefer when discussing valuing the forest estate.
At page 48 it says:<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: 36pt;"><i><span style="font-size: 14pt; line-height: 107%;">The Group does not hold freehold title over the majority of
PTPZ land but is deemed to control the land pursuant to the Forest Management
Act (2013). Any value attributed to land is therefore discounted to a nil
value.<o:p></o:p></span></i></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">Any value attributed
to the land is therefore nil is a non-sequitur. STT may not own the land, but
it controls it, therefore it’s an asset of STT for accounting purposes. The
reason STT is able to give land a nil value is because the land can only be
used to produce timber. The Crown as owner doesn’t expect a return, it only
requires STT to supply timber as per the Regulations.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">Applying the
same logic to road expenditures means roading costs incurred in harvesting
operations aren’t included as expenses when calculating net harvest proceeds,
because roads valued separately are deducted from the value of the forest
estate when deriving a value for the trees.</span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">The
following is a table showing the various components of the value of STT’s
forest estate since 2010.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;"><o:p> </o:p></span></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjc0Smk5MIAAhqocHJmuhy-lUelk4ByxR_oBZY1jyEEpKdGJv333bITAL8AWHUpssjXxpc6_J84MFDoJhZcQTuY8ZR1cGy1wHuywy7NIMayICggj1NHyOvufJICGfUvkfk-88GEGdUrvEptZA-_m4EB-pPGv4tept-8yyiVRrOmjNswvlFo8J-k3RVsPR1C/s752/stt%20oct23.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="452" data-original-width="752" height="384" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjc0Smk5MIAAhqocHJmuhy-lUelk4ByxR_oBZY1jyEEpKdGJv333bITAL8AWHUpssjXxpc6_J84MFDoJhZcQTuY8ZR1cGy1wHuywy7NIMayICggj1NHyOvufJICGfUvkfk-88GEGdUrvEptZA-_m4EB-pPGv4tept-8yyiVRrOmjNswvlFo8J-k3RVsPR1C/w640-h384/stt%20oct23.png" width="640" /></a></div><br /><div class="separator" style="clear: both; text-align: center;"><br /></div><br /><p></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">Just to explain
a little further. From 2010 land was given a zero value and is not included in the chart. In the 2013/14 year for instance the forest estate was valued
at $171 million. Land was given a zero value, the written down value of roads
was $85 million which left the trees with a value of $86 million. Forest roads
were worth as much as the trees, and both were attached to land worth zero. It
was Monty Python stuff.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">STT had to
come up with another way of valuing roads. As can be seen in years before 2016 roads
were a large proportion of a forest’s value and getting larger as the value of forests
fell in $ terms. At that stage roads were valued at cost less depreciation. It was
decided to change the method of valuing roads. Henceforth they would be valued according
to the toll income received for those roads. In 2015/16 roads were given a
value of $9 million which meant more of the forest estate, which was valued the
same way, was allocated to trees. The value of roads since 2016 doesn’t vary
much from year to year.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">Back in 2011
the Auditor General wrote a detailed report on the financial and economic
performance of STT, then called Forestry Tasmania. One of his comments was<a href="file:///C:/Users/John%20&amp;%20Julie/Documents/articles/230821%20forest%20valuation%20charade.docx#_ftn3" name="_ftnref3" style="mso-footnote-id: ftn3;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[3]</span></span><!--[endif]--></span></span></a>:
<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: 36pt;"><i><span style="font-size: 14pt; line-height: 107%;">Without stronger financial performance, investment in roads
and plantations over the past 15 years will not yield future benefits to
Forestry and arguably should be expensed rather than capitalised.<o:p></o:p></span></i></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">That’s an
accounting principle that’s still relevant. If roads aren’t going to yield
future benefits, they should be written off immediately. <span style="mso-spacerun: yes;"> </span>On past patterns future benefit are only possible
if replanting costs are excluded. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">That will
mean roads, like land, will have a zero value.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">Another
problem with the way valuers deduced the value of trees came to light <span style="mso-spacerun: yes;"> </span>in 2016. The value of the forest estate, and
hence the ensuing value of trees, included the value of forests yet to be
replanted. To overcome this very real problem, STT valued what it termed a
‘make good’ amount that needed to be spent to regenerate felled forests. This
in turn was deducted from the value of the forest estate, along with roads, to
value the current trees in the forest. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">The above
chart shows the value of the make good asset from 2015 onwards. In 2022 for
example the forest estate was worth $200 million. Land was given a zero value,
roads $11 million, the make good asset was $9 million, which left $180 million
for trees. That’s how STT currently values its trees.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">The
treatment of trees appears to show a conflicted approach. On one hand
identifying a make good asset suggests acknowledgment of the fact that a forest
is a perpetual asset, but to exclude the costs of maintaining that perpetual
asset (i.e. replanting) when assessing future net proceeds and hence the value
of a forest, is inconsistent.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">Just to
reiterate how STT treats replanting costs and road costs for both accounting
purposes and for valuation purposes.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">In the case
of replanting costs, they aren’t included when estimating net proceeds as part
of the valuation process. This means net proceeds and forest values are
overstated. Expenses incurred in any year are capitalised. <a name="_Hlk143525571">Arguably replanting costs should form part of the
valuation process and should be expensed when incurred.<o:p></o:p></a></span></p>
<span style="mso-bookmark: _Hlk143525571;"></span>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">In the case
of roads, they are also excluded when estimating net proceeds. Net proceeds and
hence forest values are overstated. A value for roads is obtained independently
which is subtracted from the value of the forest estate together with the value
of the make good asset to arrive at a value for trees. Arguably roading
costs too should form part of the valuation process and should be expensed when
incurred.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">Having eventually
determined a value for trees any movement in value from year to year is what
constitutes the major source of fluctuations in stated net profits. If roading and
replanting costs were expensed because they’re unlikely to yield future benefits,
STT like all other native forest operators would be showing big losses.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">When one
looks at STT forest valuations over time its difficult to escape the conclusion
that when values are failing to back-up the frequent assertions about the
profitability of native forest operations, STT changes the valuation method.
When forest values kept falling, the first casualty was to dispense with the
need to allocate any value to land. Values kept falling until the roads were
worth as much as the trees. Another way was needed to value roads so trees could
be allocated a higher value. Then the reality dawned on someone that forests as
valued included areas yet to replanted following harvesting. For STT it’s been
a constant changing of the valuation method to fit the narrative.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">Underpinning
STT valuations are two shaky premises:<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpFirst" style="mso-list: l0 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 107%;">STT
claims to adhere to accounting standard AASB 141. However, it values trees as
one would a planation crop rather than valuing a forest as a perpetual asset where
replanting and regeneration expenses are integral.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpLast" style="mso-list: l0 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 107%;">Land
is given a zero value which negates the need for a forest owner to allow for an
imputed return on land when valuing trees in a forest. As a corollary the costs
of non-timber losses are treated as sunk costs and are also ignored when assessing
net proceeds and hence the value of native forest harvesting.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">The shaky foundations
and the dubious interpretation of accounting standards allows STT to continue
its pretence that native forest harvesting is a sustainable activity.<o:p></o:p></span></p><p class="MsoNormal"><span style="line-height: 107%;"><span style="font-size: 14pt;">(</span><i>The above was amended on 24th Oct 2023 with a revised chart on STT Forest Estate components and a subsequent revised comment on 2022 components)</i></span></p>
<div style="mso-element: footnote-list;"><!--[if !supportFootnotes]--><br clear="all" />
<hr align="left" size="1" width="33%" />
<!--[endif]-->
<div id="ftn1" style="mso-element: footnote;">
<p class="MsoNormal"><a href="file:///C:/Users/John%20&amp;%20Julie/Documents/articles/230821%20forest%20valuation%20charade.docx#_ftnref1" name="_ftn1" style="mso-footnote-id: ftn1;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 11pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[1]</span></span><!--[endif]--></span></span></a><span style="mso-spacerun: yes;"> </span>Page 40<span style="mso-spacerun: yes;">
</span><a href="https://www.forestry.org.au/wp-content/uploads/2021/10/A_standard_for_valuing_forests_in_Australia_ACFA_July_2012.pdf"><span style="color: blue;">A_standard_for_valuing_forests_in_Australia_ACFA_July_2012.pdf
(forestry.org.au)</span></a><u><span style="color: blue;"><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></u></p>
</div>
<div id="ftn2" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="file:///C:/Users/John%20&amp;%20Julie/Documents/articles/230821%20forest%20valuation%20charade.docx#_ftnref2" name="_ftn2" style="mso-footnote-id: ftn2;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[2]</span></span><!--[endif]--></span></span></a>
2015/16 Annual Report page 94.<o:p></o:p></p>
</div>
<div id="ftn3" style="mso-element: footnote;">
<p class="MsoNormal"><a href="file:///C:/Users/John%20&amp;%20Julie/Documents/articles/230821%20forest%20valuation%20charade.docx#_ftnref3" name="_ftn3" style="mso-footnote-id: ftn3;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 11pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[3]</span></span><!--[endif]--></span></span></a>
Page 139 <a href="https://www.audit.tas.gov.au/wp-content/uploads/Forestry-Report.pdf"><span style="color: blue;">Introduction (audit.tas.gov.au)</span></a><u><span style="color: blue;"> </span></u>The quote is from a draft of the Report in April
2009 which was included in the Final Report. FT signed up a new valuer <span style="mso-spacerun: yes;"> </span>in 2010 and the method of valuation subsequently
changed.<o:p></o:p></p>
<p class="MsoFootnoteText"><o:p> </o:p></p>
</div>
</div>tasfintalkhttp://www.blogger.com/profile/04012719835733649162noreply@blogger.com0tag:blogger.com,1999:blog-4314112685994399920.post-32483152691446107572023-08-19T13:52:00.030+10:002023-08-22T15:35:35.304+10:00Hydro & Aurora Energy: Onerous contracts<p> </p><p class="MsoNormal" style="line-height: 115%; margin-bottom: 12pt;"><i><span style="font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">Power
Purchase Agreements have been used to assist developers of renewable energy
projects. These notes explain how Hydro Tasmania and Aurora Energy
account for these agreements and how accounting standards allow much of the relevant
detail to escape the reporting net.<o:p></o:p></span></i></p>
<p class="MsoNormal" style="line-height: 115%; margin-bottom: 12pt;"><i><span style="font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">Included also
is a closer look at how Hydro’s sale of a majority share in its windfarms was
only possible due to a generous Power Purchase Agreement by Hydro effectively guaranteeing
to pay the purchaser’s debt over the term of the agreement.<o:p></o:p></span></i></p>
<p class="MsoNormal" style="line-height: 115%; margin-bottom: 12pt;"><i><span style="font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">Finally
there’s a note outlining how the assumption of sunk costs are used by renewable
energy promoters to give a rosy view of individual projects. For instance, a
windfarm developer needn’t consider the costs of Marinus because it’s a sunk
cost however large.<span style="mso-spacerun: yes;"> </span>A recent article is
cited describing how sunk cost trickery understates the costs of renewable
energy projects.<span></span></span></i></p><a name='more'></a><i><o:p></o:p></i><p></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 0cm; mso-margin-top-alt: auto;"><b><span style="color: #222222; font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">Onerous contracts<o:p></o:p></span></b></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 0cm; mso-margin-top-alt: auto;"><span style="color: #222222; font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">Hydro Tasmania (HT) disclosed the value of its
onerous contracts in Note 17 of its 2022 Annual Report. Onerous contracts are
included as ‘Other provisions’ as per the cut and paste below from page 57.</span><span style="color: #222222; font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;"><o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 0cm; mso-margin-top-alt: auto;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi9zjpGsvzUv8acbfH1uWdTu4j61FGZsRhzXxlyZHdQ-VI5aRtb-qxrnXGv2j8TeP0LhRvhSXX0WImo-PUZJO1HmS_BTcJQ2tj70mXQAzDCT0up1v-7Z4kIXkvqfXkKwJc4X1ZDntxD218nnT_dHwiNYlNSjF5zgoAedFFsSQ4Z9r85rH7ya5C9NZJu4-i4/s601/oc5.png" style="margin-left: 1em; margin-right: 1em; text-align: center;"><img border="0" data-original-height="325" data-original-width="601" height="416" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi9zjpGsvzUv8acbfH1uWdTu4j61FGZsRhzXxlyZHdQ-VI5aRtb-qxrnXGv2j8TeP0LhRvhSXX0WImo-PUZJO1HmS_BTcJQ2tj70mXQAzDCT0up1v-7Z4kIXkvqfXkKwJc4X1ZDntxD218nnT_dHwiNYlNSjF5zgoAedFFsSQ4Z9r85rH7ya5C9NZJu4-i4/w637-h416/oc5.png" width="637" /></a></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 0cm; mso-margin-top-alt: auto;"><span style="color: #222222; font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">Readers will note the figures
are for both the Parent Entity (HT) and for the Consolidated Entity (HT plus
its subsidiaries which in this instance means AETV which is the Tamar Valley
gas power station transferred from Aurora Energy in 2013).<o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 0cm; mso-margin-top-alt: auto;"><span style="color: #222222; font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">We can be reasonably certain the
onerous contract in HTs books (the parent entity) of $100.7 million relates to the
LGCs with Woolnorth Windfarm Holdings P/L (which includes Musselroe) and with
Granville Harbour. The additional onerous contract in the books of the
Consolidated Group (of $42.6million being $143.3 million less $100.7 million) almost certainly
relates to the gas pipeline deal with AETV.<o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 0cm; mso-margin-top-alt: auto;"><span style="color: #222222; font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">The reduction in the value of
onerous windfarm contracts of $139 million in the 21/22 year reflects the movements
in LGC prices in the futures markets. The reduction in value for the year is
included with ‘Fair value gains’ in the P&L of $145 million (from page 40 of the
2022 Annual Report). At 30<sup>th</sup> June 2022 the future expected stream of
payment to the 2x windfarm operators had a present value of $100.7 million. In
nominal terms the level of payments will be much higher, $150 million say over the
period until 2030, but the stream is recorded in the balance sheet with a lump
sum present value of $100.7 million. <o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 0cm; mso-margin-top-alt: auto;"><span style="color: #222222; font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">In any year the level of
payments to the windfarm operator depends on LGC prices, whether they are more
or less than the contracted price. In 22/23, the reduction in the value of
onerous contracts implied there was a reduction in the difference between the
market and the contract price for LGCs. Page 101 indicates what it cost HT in
2021/22:<o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 0cm; mso-margin-top-alt: auto;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhMPAEUNikgwdeICWBdTCA-1tWzngrQKFVW5odtAPU-dMtCjahSBL8sYh8I9o1-VAOujEC_LNb2iJmv6lXNcqIWo5K2OhT7t69vn-2V7MQdNRs5uu14Ju_FWA5j5zlKG2GyvZOagu9HBrdZQruQTsjMgbsYvXIKUvBOY5A52A6wm9GWn2A3z7Ym86hsYx-f/s602/oc4.png" style="margin-left: 1em; margin-right: 1em; text-align: center;"><img border="0" data-original-height="399" data-original-width="602" height="382" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhMPAEUNikgwdeICWBdTCA-1tWzngrQKFVW5odtAPU-dMtCjahSBL8sYh8I9o1-VAOujEC_LNb2iJmv6lXNcqIWo5K2OhT7t69vn-2V7MQdNRs5uu14Ju_FWA5j5zlKG2GyvZOagu9HBrdZQruQTsjMgbsYvXIKUvBOY5A52A6wm9GWn2A3z7Ym86hsYx-f/w522-h382/oc4.png" width="522" /></a></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 0cm; mso-margin-top-alt: auto;"><span style="color: #222222; font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">Fortunately, the cash outlay to Granville Harbour for LGCs in the 2022 years was only $1.6 million. It must be noted that HT, by
recording its liability to Granville Harbour as a CSO, is indicating that it
doesn’t regard it as a commercial arrangement that it willingly signed up for,
rather an obligation that was imposed on it by the shareholder minister.<o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 0cm; mso-margin-top-alt: auto;"><span style="color: #222222; font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">Payments to WWFs were not
separately mentioned in the Annual Report. <o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 0cm; mso-margin-top-alt: auto;"><span style="color: #222222; font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">Overall, we know the value of
onerous contracts fell by $139 million mostly as a result of revaluation, with only
a small amount due to the actual payment made. In the previous year things were
the complete opposite. Not only were payments made but the future value of
expected payments rose, as can be seen, to $239.9 million at 30<sup>th</sup> June
2021.<o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 0cm; mso-margin-top-alt: auto;"><span style="color: #222222; font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">How much will be paid in the
future depends entirely on how LGC market prices differ from the contract
prices.<o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 0cm; mso-margin-top-alt: auto;"><span style="color: #222222; font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">Power Purchase Agreements PPAs
usually cover not only the LGCs but the electricity itself.<span style="background: yellow; mso-highlight: yellow;"> </span>The LGC deal is a
financial instrument and movements are recorded as just described. On the other
hand, the liability for a top up payment of wholesale electricity proceeds
doesn’t arise till the electricity is sold into the market. The
exact liability is not known until that occurs so it doesn’t appear as a
liability because it's paid almost immediately.<o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 0cm; mso-margin-top-alt: auto;"><span style="color: #222222; font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">Hence there is nothing in HTs
financials to indicate future possible top up payments expected when PPA
electricity contract prices exceed spot prices. Accounting standards often
produce anomalies. The different treatment of LGC top ups versus electricity
price top ups is one such anomaly. <o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 0cm; mso-margin-top-alt: auto;"><span style="color: #222222; font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">Before the current rises in
wholesale prices HT was almost certainly subsidising the 2x windfarms’
electricity prices. In the last year payments may have gone in the other
direction. We know from WWFs publicly released financials this was the case. In
2021 HT paid WWF a subsidy of $24 million just for electricity because spot prices
were so low.<o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 0cm; mso-margin-top-alt: auto;"><span style="color: #222222; font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">But we don’t know what happens
with Granville Harbour because HT refuse to divulge any details about the PPA.<o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 0cm; mso-margin-top-alt: auto;"><span style="color: #222222; font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">Cattle Hill is analogous to
Granville in some respects, although the government entity is Aurora Energy and
Aurora Energy doesn’t list it as a CSO.<o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 0cm; mso-margin-top-alt: auto;"><span style="color: #222222; font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">This is from p93 of Aurora’s
Annual Report for 2021/22:<o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 0cm; mso-margin-top-alt: auto;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgEupvOqn6KtIPaNrujyc7lBmr6iZviYoyHmbCr_liZmleGXcZXA0A5KakFZuzaXcL42EZFALBF4sM3xSBMaZaSB4HqEp52rYdY_-DtRJW3qgkhqPQJ6OtI7iCesHvc7ouXZ2GoyK-bjnSbgGdG497k4a5nZwol0luXER5rVNxyCcAuZPUv7mLAp83GbcP2/s601/oc3.png" style="margin-left: 1em; margin-right: 1em; text-align: center;"><img border="0" data-original-height="385" data-original-width="601" height="376" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgEupvOqn6KtIPaNrujyc7lBmr6iZviYoyHmbCr_liZmleGXcZXA0A5KakFZuzaXcL42EZFALBF4sM3xSBMaZaSB4HqEp52rYdY_-DtRJW3qgkhqPQJ6OtI7iCesHvc7ouXZ2GoyK-bjnSbgGdG497k4a5nZwol0luXER5rVNxyCcAuZPUv7mLAp83GbcP2/w564-h376/oc3.png" width="564" /></a></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 12pt; mso-margin-top-alt: auto;"><span style="color: #222222; font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">The liability for the onerous
contract with Cattle Hill <span style="mso-spacerun: yes;"> </span>at the end of
the 2022 years was only $6.8 million having reduced significantly during the 21/22
year due to rises in future LGC prices. It’s not just movement in current LGC
prices, rather how the prices for future LGCs, say 2026 LGCs and 2027 and
beyond, which determine the overall value of LGC contracts in the 2022
financials. <o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 115%; margin-bottom: 12pt; mso-margin-top-alt: auto;"><span style="color: #222222; font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">But again we don’t know how that
part of the PPA covering wholesale electricity markets impacted Aurora, what it
cost them in 2021/22 to make top up payments. Or maybe it received payments <b><u>from</u></b>
Cattle Hill? We just don’t know.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 115%; margin-bottom: 12pt;"><span style="font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">Why does Hydro Tasmania, a renewable energy
generator, buy LGCs? These certificates are created by generators of
electricity and sold to energy retailers who have an obligation to buy them. <span style="mso-spacerun: yes;"> </span>HT includes under Other financial assets (Note
11 in the 2022 Annual Report) includes unsold LGCs, described as ‘environmental
energy products’. At 30<sup>th</sup> June 2022 HT had $59 million worth of unsold
LGCs. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 115%; margin-bottom: 12pt;"><span style="font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">Maybe it makes sense for Aurora as a retailer to do
a deal with Cattle Hill. It buys LGCs which are then handed over and cancelled
by the Regulator as required. At 30<sup>th</sup> June 2022 it only had $3 million worth of LGCs (included under Inventory in Note C2 of the 2022 Annual Report.)</span><span style="font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-font-kerning: 0pt;"><o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 115%; margin-bottom: 12pt;"><span style="font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">At best we know only a fraction of the story, and
that is the value of the onerous contracts that relates to LGCs. They are
recorded in financial statements because they’re financial instruments and
accounting standards require them to be treated that way.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 115%; margin-bottom: 12pt;"><span style="font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">But the other half of a PPA relates to a contract
for wholesale electricity. When payments for wholesale electricity pursuant to
a PPA are made, they are lumped with all other purchases and hence a breakup is
impossible. In addition, accounting standards don’t require future liabilities
to be recognised. A liability only arises for accounting purposes when the
electricity has been produced. So even though we might be able to make a
reasonable guess about what a future liability might be, accounting standards
don’t require it and hence HT doesn’t divulge it.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 115%; margin-bottom: 12pt;"><b><span style="font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">HT and the WWF deal<a href="file:///C:/Users/John%20&amp;%20Julie/Documents/articles/230819%20Onerous%20contracst%20and%20other%20matters.docx#_ftn1" name="_ftnref1" style="mso-footnote-id: ftn1;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><b style="mso-bidi-font-weight: normal;"><span style="font-family: "Georgia",serif; font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-bidi-font-family: Calibri; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">[1]</span></b></span><!--[endif]--></span></span></a><o:p></o:p></span></b></p>
<p class="MsoNormal" style="line-height: 115%; margin-bottom: 12pt;"><span style="font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">HT transferred Woolnorth and Musselroe windfarms to
WWF together with a large amount of debt. At that stage HT owned all the shares
in WWF. It then sold a 75% interest to Shenhua, a Chinese government owned
entity in two tranches, $88 million in 2011 and $90 million in 2013 totalling
$178 million approximately. It retained a 25% interest worth just under $60 million.
Essentially the assets were transferred to WWF at cost so there were no gains
on disposal.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 115%; margin-bottom: 12pt;"><span style="font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">Currently in HT books its 25% interest is worth $58 million at 30<sup>th</sup> June 2022 as per Note 7 in the 2022 financial statements:<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 115%; margin-bottom: 12pt;"><span style="font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="line-height: 115%; margin-bottom: 12pt;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgrAK0jW0hwUBpau63TUTk9RDAMAVRalcMMnIwKEr3ie8Sjxuvh_-hRopHGduwXOtFfsfa-xwzFr6Lrq2BFOeF_fLE5mR7cYyd9olZhKffjaedSCreOYngjU15QdKOJ47mWoOabrSjYBeW6at7k7iFsW9PZrU0TbeSaDWHs8FP7vc8kQxyrcOYIKGfH_bgt/s547/oc2.png" style="margin-left: 1em; margin-right: 1em; text-align: center;"><img border="0" data-original-height="219" data-original-width="547" height="227" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgrAK0jW0hwUBpau63TUTk9RDAMAVRalcMMnIwKEr3ie8Sjxuvh_-hRopHGduwXOtFfsfa-xwzFr6Lrq2BFOeF_fLE5mR7cYyd9olZhKffjaedSCreOYngjU15QdKOJ47mWoOabrSjYBeW6at7k7iFsW9PZrU0TbeSaDWHs8FP7vc8kQxyrcOYIKGfH_bgt/w499-h227/oc2.png" width="499" /></a></p>
<p class="MsoNormal" style="line-height: 115%; margin-bottom: 12pt;"><span style="font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">HT’s 25% share
of WWF was worth $60 million in 2013. Little has changed, although it has
received some income over the years.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 115%; margin-bottom: 12pt;"><span style="font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">However, if
one were to deduct the value of the onerous contract for WWF’s LGCs, not to
mention the undisclosed contingent liability for future wholesale electricity
price top-ups, HT’s 25 % share of WWF is probably negative. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 115%; margin-bottom: 12pt;"><span style="font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">The PPAs
which the Chinese insisted before agreeing to the deal to buy 75% of WWF, effectively
guarantees the payment of WWFs debt by HT. <span style="mso-spacerun: yes;"> </span>Back in 2012/13 WWF had debt of $420 million. By
2030 WWF’s existing debt will likely all be paid, thanks in no small part to
the generous PPA. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 115%; margin-bottom: 12pt;"><span style="font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">That
pre-empts the question, why didn’t HT hang on to WWF instead of guaranteeing
the Chinese government to take it over? <span style="mso-spacerun: yes;"> </span>The answer to that requires a closer look at
HT financials. The WWF divestment occurred at roughly the same time as HT was
about to be burdened with $205 million of debt when the Labor government forced
it to take over AETV, the Tamar Valley gas power station, which HT had to write
down by $335 million when it took over ownership on 1st June 2013. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 115%; margin-bottom: 12pt;"><span style="font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">The
movement in HT’s debt from 2011 to 2013 can be seen in the following table:<o:p></o:p></span></p>
<table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; mso-padding-alt: 0cm 5.4pt 0cm 5.4pt; mso-yfti-tbllook: 1184; width: 535px;">
<tbody><tr style="height: 15.75pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
<td colspan="3" nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 401pt;" valign="bottom" width="535">
<p align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; font-family: "Georgia",serif; font-size: 12pt; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">HT borrowings 2011/12 to 2012/13 $ '000</span></b></p>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 1;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 261.55pt;" valign="bottom" width="349"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 68.8pt;" valign="bottom" width="92">
<p align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; font-family: "Georgia",serif; font-size: 12pt; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">2011/12<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 70.65pt;" valign="bottom" width="94">
<p align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; font-family: "Georgia",serif; font-size: 12pt; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">2012/13<o:p></o:p></span></b></p>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 2;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 261.55pt;" valign="bottom" width="349">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><span style="color: black; font-family: "Georgia",serif; font-size: 12pt; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">Opening balance<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 68.8pt;" valign="bottom" width="92">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-family: "Georgia",serif; font-size: 12pt; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">$969,876<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 70.65pt;" valign="bottom" width="94">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-family: "Georgia",serif; font-size: 12pt; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">$850,600<o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 3;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 261.55pt;" valign="bottom" width="349"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 68.8pt;" valign="bottom" width="92"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 70.65pt;" valign="bottom" width="94"></td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 4;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 261.55pt;" valign="bottom" width="349">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 12pt;"><span style="color: black; font-family: "Georgia",serif; font-size: 12pt; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">Changes as per cash flow statement<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 68.8pt;" valign="bottom" width="92">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-family: "Georgia",serif; font-size: 12pt; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">$27,999<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 70.65pt;" valign="bottom" width="94">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; font-family: "Georgia",serif; font-size: 12pt; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">-$155,600</span><span style="color: black; font-family: "Georgia",serif; font-size: 12pt; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 5;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 261.55pt;" valign="bottom" width="349">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 12pt;"><span style="color: black; font-family: "Georgia",serif; font-size: 12pt; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">Add AETV borrowings<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 68.8pt;" valign="bottom" width="92">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-family: "Georgia",serif; font-size: 12pt; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">$0<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 70.65pt;" valign="bottom" width="94">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-family: "Georgia",serif; font-size: 12pt; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">$205,000<o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 6;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 261.55pt;" valign="bottom" width="349">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 12pt;"><span style="color: black; font-family: "Georgia",serif; font-size: 12pt; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">Less WWF borrowings transferred<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 68.8pt;" valign="bottom" width="92">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-family: "Georgia",serif; font-size: 12pt; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">$147,275<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 70.65pt;" valign="bottom" width="94">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-family: "Georgia",serif; font-size: 12pt; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">$0<o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 7;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 261.55pt;" valign="bottom" width="349"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 68.8pt;" valign="bottom" width="92"></td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 70.65pt;" valign="bottom" width="94"></td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 8; mso-yfti-lastrow: yes;">
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 261.55pt;" valign="bottom" width="349">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><span style="color: black; font-family: "Georgia",serif; font-size: 12pt; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">Closing balance<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 68.8pt;" valign="bottom" width="92">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-family: "Georgia",serif; font-size: 12pt; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">$850,600<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15.75pt; padding: 0cm 5.4pt; width: 70.65pt;" valign="bottom" width="94">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-family: "Georgia",serif; font-size: 12pt; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">$900,000<o:p></o:p></span></p>
</td>
</tr>
</tbody></table>
<p class="MsoNormal" style="line-height: 115%; margin-bottom: 0cm;"><span style="font-family: "Georgia",serif; font-size: 12pt; line-height: 115%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="line-height: 115%; margin-bottom: 12pt;"><span style="font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">In the 2012
year when HT received the first tranche of $88 million from Shenhua, whilst it
managed to transfer $147 million of debt to WWF, it had to use the first tranche as
well as borrow another $28 million to finish building Musselroe, which it did before
transferring Musselroe to WWF and receiving the second tranche of $90 million from
Shenhua in 2013.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 115%; margin-bottom: 12pt;"><span style="font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">HT was able
to reduce its existing debt by $155.6 million in 2013 due in part to the $90 million second
tranche. But 2013 was also one of HT’s best ever years being one of the 2x
carbon tax years. Over the 2 years HT’s debt only reduced by $70 million.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 115%; margin-bottom: 12pt;"><span style="font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">The LGC
scheme is part of government incentives to encourage 33,000 MW of new renewable
energy. Eligible projects had to register by 2020, although they were given
time to become operational. The scheme ends in 2030. New wind farms proposed
after 2020 are not able to generate LGCs and therefore PPAs will probably only
cover electricity prices.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 115%; margin-bottom: 12pt;"><b><span style="font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">Sunk cost
trickery<o:p></o:p></span></b></p>
<p class="MsoNormal" style="line-height: 115%; margin-bottom: 12pt;"><span style="font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">Sunk costs
are costs that have been incurred and can’t be recovered and which are ignored
when making investment decisions.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 115%; margin-bottom: 12pt;"><span style="font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">It’s a
familiar occurrence when looking at the economics of investment projects.
Projects are unbundled into let’s say, 2x sub-projects. Each assumes the other
is proceeding and treats the other’s costs as sunk costs. That way each sub-
project might look ok, but had they been treated as one project a different
result may well have eventuated.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 115%; margin-bottom: 12pt;"><span style="font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">Promoters
of electricity generation and transmission projects are notorious for using
sunk cost assumptions to make their individual projects stack up. A recent</span></p><p class="MsoNormal" style="line-height: 115%; margin-bottom: 12pt;"><span style="font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">article summarised the use of sunk cost trickery in the renewables space. <a href="file:///C:/Users/John%20&amp;%20Julie/Documents/articles/230819%20Onerous%20contracst%20and%20other%20matters.docx#_ftn2" name="_ftnref2" style="mso-footnote-id: ftn2;" title=""><sup><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><sup><span style="font-family: "Georgia",serif; font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">[2]</span></sup><!--[endif]--></span></sup></a> The
conclusions are pasted below:<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 115%; margin-bottom: 12pt;"><span style="font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;"><o:p> </o:p></span><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhka6S1EC75V_FRcQi3og0JXgL2MQLTVEsZawbWXwnYzfZVhgtrDHVSHS2crTeorywiAVcKEUaAjzpj5XwmJt3Ri--7T9jLs17Zar5SqcYjiXfKDSPelsnNEkxNFY0-vFY0AAK8gkCba01s6O_f1BXnkR525mGm5vs9mFJ2zSnsHPSRVq-NZETqGEdwi3O9/s773/oc1.png" style="margin-left: 1em; margin-right: 1em; text-align: center;"><img border="0" data-original-height="683" data-original-width="773" height="494" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhka6S1EC75V_FRcQi3og0JXgL2MQLTVEsZawbWXwnYzfZVhgtrDHVSHS2crTeorywiAVcKEUaAjzpj5XwmJt3Ri--7T9jLs17Zar5SqcYjiXfKDSPelsnNEkxNFY0-vFY0AAK8gkCba01s6O_f1BXnkR525mGm5vs9mFJ2zSnsHPSRVq-NZETqGEdwi3O9/w539-h494/oc1.png" width="539" /></a></p>
<p class="MsoNormal" style="line-height: 115%; margin-bottom: 12pt;"><br /></p>
<p class="MsoNormal" style="line-height: 115%; margin-bottom: 12pt;"><span style="font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">If people
are unsure, Marinus on one hand, and windfarms and Battery of Nation on the
other hand, are classic cases where sunk cost assumptions are used. Most
readers are unaware of the built in trickery.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 115%; margin-bottom: 12pt;"><span style="font-family: "Georgia",serif; font-size: 14pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">Most people
are also unaware that Basslink was based on similar shaky foundations. Basslink
was being assessed in the early 2000’s at the same time as the gas pipeline
interconnector received the go-ahead. Deputy Premier Lennon at the time was an
unashamed supporter of both. From Hydro’s viewpoint electricity from gas had
the potential to compete in the same markets. On the other hand, electricity
from subsidised gas had the potential to generate more on-island electricity.
The final Basslink business case agreed to by Hydro’s Board in November 2002
assumed 2,000 GWh of electricity from gas would be produced each year, allowing
Tasmania to become a net exporter thus reaping the arbitrage advantages thereby
justifying the building of Basslink. It never eventuated. Tasmania has been a
net importer in most years. It’s been a costly lesson, which current policy
makers and politicians are only too willing to ignore.<o:p></o:p></span></p>
<div style="mso-element: footnote-list;"><!--[if !supportFootnotes]--><br clear="all" />
<hr align="left" size="1" width="33%" />
<!--[endif]-->
<div id="ftn1" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="file:///C:/Users/John%20&amp;%20Julie/Documents/articles/230819%20Onerous%20contracst%20and%20other%20matters.docx#_ftnref1" name="_ftn1" style="mso-footnote-id: ftn1;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: "Times New Roman",serif; font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB; mso-font-kerning: 0pt; mso-ligatures: none;">[1]</span></span><!--[endif]--></span></span></a>
<span face=""Calibri",sans-serif" style="font-size: 11pt; mso-ascii-theme-font: minor-latin; mso-bidi-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">For
a more detailed discussion of<span style="mso-spacerun: yes;"> </span>PPAs and
WWF see <a href="https://tasfintalk.blogspot.com/2022/06/marinus-and-case-for-more-tasmanian.html"><span style="color: blue;">Tasfintalk: Marinus and the case for more Tasmanian wind
farms</span></a></span><o:p></o:p></p>
</div>
<div id="ftn2" style="mso-element: footnote;">
<p class="MsoNormal" style="line-height: 115%; margin-bottom: 12pt;"><a href="file:///C:/Users/John%20&amp;%20Julie/Documents/articles/230819%20Onerous%20contracst%20and%20other%20matters.docx#_ftnref2" name="_ftn2" style="mso-footnote-id: ftn2;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 11pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[2]</span></span><!--[endif]--></span></span></a>
<a href="https://www.fresheconomicthinking.com/p/the-sunk-cost-trickery-that-makes"><span style="color: blue;">The 'sunk cost' trickery that makes renewables seem cheaper
than they are (fresheconomicthinking.com)</span></a><span style="font-family: "Georgia",serif; font-size: 14pt; line-height: 115%;"><o:p></o:p></span></p>
<p class="MsoFootnoteText"><o:p> </o:p></p><div class="separator" style="clear: both; text-align: center;"><br /></div><br /><div class="separator" style="clear: both; text-align: center;"><br /></div><br /><div class="separator" style="clear: both; text-align: center;"><br /></div><br /><div class="separator" style="clear: both; text-align: center;"><br /></div><br /><div class="separator" style="clear: both; text-align: center;"><br /></div><br /><p></p>
</div>
</div>tasfintalkhttp://www.blogger.com/profile/04012719835733649162noreply@blogger.com0tag:blogger.com,1999:blog-4314112685994399920.post-37204478703383129422023-08-04T06:45:00.015+10:002023-08-07T16:53:21.539+10:00STT revisited <p> <span style="font-size: 14pt;">Most people hoped we’d heard and seen the last of them.</span></p>
<p class="MsoNormal" style="line-height: 115%;"><span style="font-size: 14pt; line-height: 115%;">But then a bell rang, and out they came, like the travelling
troupers from Harry Paulsen’s Touring Stadium. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 115%;"><span style="font-size: 14pt; line-height: 115%;">The forest fighters were back, determined as always to ignore
recent events if it didn’t suit their narrative.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 115%;"><span style="font-size: 14pt; line-height: 115%;">The spark that re- ignited the fire was the decision of the
Victorian government to halt native forest logging. It was described as a Dan
Andrews stuff up, as the actions of an anti-forestry government, but that shows
a wilful ignorance of the financial unsustainability of native forest harvesting
in general and VicForests in particular, where the final nail in its coffin
were the massive 2020 bushfires.<span></span></span></p><a name='more'></a><o:p></o:p><p></p>
<p class="MsoNormal" style="line-height: 115%;"><span style="font-size: 14pt; line-height: 115%;">VicForests doesn’t own native forests, rather it gets allocated
tracts of Crown forests to harvest. After logging and replanting, the regrowth is
returned to the Crown. That was the plan. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 115%;"><span style="font-size: 14pt; line-height: 115%;">Even though standing timber was a gift from the Crown,
VicForests struggled to generate enough cash to cover replanting costs. Coupes
were increasingly remote and more costly to log. The 2020 bushfires led to a
failure to supply contracted timber in the 2021/22 year and compensation was
paid to contractors and customers. The government refused to reimburse
VicForests for amounts paid and the debt had to be written off. The 22/23 year
was even worse. VicForests was insolvent.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 115%;"><span style="font-size: 14pt; line-height: 115%;">The right to compensation doesn’t apply in cases of force
majeure. Many will remember that was
Basslink’s defence when Hydro and the State government sued for compensation
following the 2016 cable outage. Paying $50 million a year for the next eight
years to prop up an insolvent VicForests overseeing further degradation of public
forests was the prospect facing the Victorian government. It wasn’t a shock
when native forest harvesting was called off. To not have done so would have
been more of a shock.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 115%;"><span style="font-size: 14pt; line-height: 115%;">Sustainable Timbers Tasmania P/L (STT) has much in common
with VicForests. Any native forests on its books are gifts from the Crown. It
may post book profits in some years, but underlying cash deficits from
operations confirm it is financially unsustainable. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 115%;"><span style="font-size: 14pt; line-height: 115%;">STT uses a loophole in accounting standards to pretend it is
financially sustainable. The starting point for valuing a forest estate are estimated
future revenues less harvest and associated costs and holding costs over time. The
net proceeds are then converted into current dollars to give a value for the
forest estate. Conceptually it’s simple.
A forest is worth what you can get for the timber after costs. If some costs
are overlooked the forest estate has a higher value. STT doesn’t include the
costs of access roads or replanting costs. For a perpetual asset like a forest
estate excluding some costs gives a false value. Were they included net
proceeds would be negative and hence the value would be negative. That means
STT would be underwater, just like VicForests. To assert we have a world class
sustainable forest industry is a Trumpian exaggeration.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 115%;"><span style="font-size: 14pt; line-height: 115%;">If STT makes a profit, it’s just a paper profit, principally
due to increases in the book value of its forest estate. Cash losses from
forestry operations are a much more appropriate measure of financial sustainability.
They rarely rate a mention. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 115%;"><span style="font-size: 14pt; line-height: 115%;">STT can fund cash deficits for a few more years because it still
has some cash on hand following the sale of the majority of its plantations, meant
to allow STT to transition to a plantation-based operation, funded entirely by
governments, but sold well before harvest time at a considerable loss. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 115%;"><span style="font-size: 14pt; line-height: 115%;">Effectively that makes the sale proceeds just another handout
to prop up a scaled down STT, enabling it to sell native forest timber at less
than break-even prices to self-entitled locals who are now complaining about
subsidised Victorians encroaching on their turf.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 115%;"><span style="font-size: 14pt; line-height: 115%;">Hundreds of millions of government grants under the Tasmanian
Community Forest Agreement (TCFA) and the Tasmanian Forests Intergovernmental
Agreement (IGA) have been showered upon contractors and processors to
restructure and for STT to fund operations and expand its plantations. But
after running out of grant funds (and acronyms), and despite shifting its large
superannuation liability to the government, STT’s only survival option was to
sell its plantations. The alternative was insolvency, the fate that now awaits
VicForests. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 115%;"><span style="font-size: 14pt; line-height: 115%;">Adversarial politics is usually introduced to muddy the
waters and avoid the need to understand issues. The Labor Party isn’t as
anti-forestry as Resources Minister Felix Ellis alleges. There are many on that
side of the fence who have the same remedial understanding of forestry
financial statements as he does. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 115%;"><span style="font-size: 14pt; line-height: 115%;">Dan Andrews didn’t stuff up VicForests. STT is only one mega
bushfire, one act of force majeure, removed from VicForests. A more fitting
description of the state of our native forest industry is ‘There but for the
grace of God, go I’.<o:p></o:p></span></p><p class="MsoNormal" style="line-height: 115%;"><span style="line-height: 115%;"><i>(as published in The Mercury 4th August 2023)</i></span></p><p class="MsoNormal" style="line-height: 115%;"><b><span style="font-size: 14.0pt; line-height: 115%;">Addendum 7<sup>th</sup> Aug 2023<o:p></o:p></span></b></p><p class="MsoNormal" style="line-height: 115%;"><span style="font-size: 14.0pt; line-height: 115%;">There’s wasn’t enough space in a 800 word op ed to raise all
the relevant issue.<o:p></o:p></span></p><p class="MsoNormal" style="line-height: 115%;"><span style="font-size: 14.0pt; line-height: 115%;">One such issue is the alleged flow on benefits of the native
forest industry.<o:p></o:p></span></p><p class="MsoNormal" style="line-height: 115%;"><span style="font-size: 14.0pt; line-height: 115%;">The Mercury printed a letter in response to the above op ed
from a retired forester on 7<sup>th</sup> August 2023 which stated in part:<o:p></o:p></span></p><p class="MsoNormal" style="margin-left: 36.0pt;"><i><span style="font-size: 14.0pt; line-height: 107%;">Like most critics of native forestry, “independent observer”
John Lawrence makes the mistake of asserting that the financial accounts of the
government agency that sells logs (ie. STT or VicForests) measures the
sustainability of native forest harvesting (Talking Point, August 4).<o:p></o:p></span></i></p><p class="MsoNormal" style="margin-left: 36.0pt;"><i><span style="font-size: 14.0pt; line-height: 107%;"> In reality, more than
90 per cent of the economic activity and employment that flows from timber
harvesting is generated within the industry that purchases and processes those
logs into usable wood products. Accordingly, the profitability of the
government’s forestry agency forms only a minor component of the overall
socio-economic value of native forest harvesting. <o:p></o:p></span></i></p><p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">This is not
an uncommon justification for native forest harvesting. <o:p></o:p></span></p><p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">The problem with
it is that it conflates financial sustainability of the logging agency with flow
on effects into the broader economy. <o:p></o:p></span></p><p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">Financial sustainability
of a logging agency and measures of flow-on economic activity are two vastly different
issues. <o:p></o:p></span></p><p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">That there is
flow on effects is not disputed. There are flow effects with most activities. Selling
Queen Anne furniture for firewood, say? Or
maybe like Federal Hotels trumpeting the flow on effects from its gambling business.<o:p></o:p></span></p><p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">It’s the
flow on costs which are often ignored ……the negative externalities.<o:p></o:p></span></p><p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">What is also
ignored by promoters of a particular industry, is the benefits that
would flow if the inputs into that industry
were instead directed into another activity. Even if clear-felling has some flow on benefits, are there other uses for a native forest that might produce flow on benefits? Perhaps ask the Blue Derby Mountain Bike
promoters if you’re unsure. <o:p></o:p></span></p><p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">Foresters
attribute a nil value to STT land so when it’s logged there are a myriad of non-timber
losses that go unrecorded.<o:p></o:p></span></p><p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">Then there’s
the run down in the value of native forests. If a logging agency is financially
unsustainable (which the letter writer seems to tacitly accept) native forest
logging reduces the State’s balance sheet with every passing year. Nothing else
is possible. It’s an iron clad law of accounting. It is not a polemical
assertion.<o:p></o:p></span></p><p class="MsoNormal" style="line-height: 115%;"><span style="line-height: 115%;">
</span></p><p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">If you want
to talk about flow on benefits, you must also mention the flow on costs. The
run down in the State’s balance sheet plus all the unrecorded non-timber losses
year after year can’t be ignored.<o:p></o:p></span></p><p class="MsoNormal" style="line-height: 115%;"><br /></p>tasfintalkhttp://www.blogger.com/profile/04012719835733649162noreply@blogger.com3tag:blogger.com,1999:blog-4314112685994399920.post-25005627956774562972023-07-24T20:18:00.000+10:002023-07-24T20:18:41.968+10:00Borrowings: La Trobe Uni and the lessons for UTAS<p> </p><p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">La Trobe
University (LU) today announced its intention to raise funds via a Green Bond
issue following in the footsteps of UTAS Green Bond raising of $350 million in
the 2022 year. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">The amount
to be raised is not known at this stage and is irrelevant for the purpose of
this note which is to have a quick look at the requirements/restrictions for LU
to raise money in this manner and provide the current Leg Co Committee looking
into UTAS with information which may assist their deliberations.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">What lessons
are there for UTAS?<span></span></span></p><a name='more'></a><o:p></o:p><p></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">The term
Green Bond is essentially a term from a marketing department designed to pique
interest, possibly in the hope that an investor may accept a slightly lower
rate of interest as a trade off to saving the planet. A Green Bond is a
security just like any other bond. Bonds are alternatives to loans and other
borrowing like arrangements.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">LU is an
entity created by the La Trobe University Act 2009, a Victorian Act. Borrowing
powers are covered by Sec 45:<o:p></o:p></span></p>
<p class="MsoNormal"><b>45 <span style="mso-tab-count: 1;"> </span>Borrowing
powers<o:p></o:p></b></p>
<p class="MsoNormal"><span style="mso-spacerun: yes;"> </span>(1) Subject to this
Act, for the purpose of carrying out or performing any of its powers,
authorities, duties or functions, the University may— <o:p></o:p></p>
<p class="MsoNormal" style="text-indent: 36.0pt;">(a) borrow money at interest by
way of mortgage, overdraft with an ADI or otherwise; or <span style="mso-tab-count: 1;"> </span><o:p></o:p></p>
<p class="MsoNormal" style="text-indent: 36.0pt;">(b) without limiting paragraph
(a)— <span style="mso-tab-count: 1;"> </span><o:p></o:p></p>
<p class="MsoNormal" style="margin-left: 36.0pt; text-indent: 36.0pt;">(i) obtain <span style="background: yellow; mso-highlight: yellow;">financial accommodation</span>
within the meaning of section 3 of the <b><i>Borrowing and Investment Powers
Act 1987</i></b>; or <o:p></o:p></p>
<p class="MsoNormal" style="margin-left: 36.0pt; text-indent: 36.0pt;">(ii) enter
into and perform <span style="background: yellow; mso-highlight: yellow;">financial
arrangements</span> within the meaning of that section of that Act. <o:p></o:p></p>
<p class="MsoNormal">(2) Subsection (1) applies within the limits and upon the
conditions as to security and otherwise as the Treasurer, from time to time,
approves after consultation with the Minister.<o:p></o:p></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">NB ADI means
authorized deposit-taking institution, in other words, a bank.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">Pretty
straightforward. The Treasurer and the responsible Minister have the final say
on conditions and security for any proposed borrowings which are undertaken
pursuant to the <b><i>Borrowing and Investment Powers Act 1987</i></b>. Borrowing
powers (including guarantees) are covered by Part 2 of that Act.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">Sec 4 sets
out the general approach:<o:p></o:p></span></p>
<p class="MsoNormal"><b>4<span style="mso-tab-count: 1;"> </span>
General borrowing authorisation</b> <o:p></o:p></p>
<p class="MsoNormal" style="text-indent: 36.0pt;">An authority may, for the purpose
of performing its functions or exercising its powers—<span style="mso-tab-count: 1;"> </span><o:p></o:p></p>
<p class="MsoNormal" style="margin-left: 36.0pt; text-indent: 36.0pt;"><span style="mso-spacerun: yes;"> </span>(a) exercise any power conferred on it by this
Part; and <o:p></o:p></p>
<p class="MsoNormal" style="margin-left: 36.0pt; text-indent: 36.0pt;">(b) with the
approval of the Governor in Council on the recommendation of the Treasurer, do
anything necessary for, or incidental to, the exercise of any power conferred
on it by this Part<o:p></o:p></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">Financial accommodation
is covered by sections 5 to 11. From the definitions in sec 3:<o:p></o:p></span></p>
<p class="MsoNormal"><b><i><span style="background: yellow; mso-highlight: yellow;">financial
accommodation</span></i></b> means a financial benefit or assistance to obtain
a financial benefit arising from or as a result of— <o:p></o:p></p>
<p class="MsoNormal" style="margin-left: 36.0pt;">(a) a loan; <o:p></o:p></p>
<p class="MsoNormal" style="margin-left: 36.0pt;">(b) issuing, endorsing or
otherwise dealing in promissory notes; <o:p></o:p></p>
<p class="MsoNormal" style="margin-left: 36.0pt;">(c) drawing, accepting, endorsing
or otherwise dealing in bills of exchange; <o:p></o:p></p>
<p class="MsoNormal" style="margin-left: 36.0pt;">(d) issuing, purchasing or
otherwise dealing in securities;<o:p></o:p></p>
<p class="MsoNormal" style="margin-left: 36.0pt;"><span style="mso-spacerun: yes;"> </span>(e) granting or taking a lease of any real or
personal property for financing but not for operating purposes; (<o:p></o:p></p>
<p class="MsoNormal" style="margin-left: 36.0pt;">f) any other <span style="background: yellow; mso-highlight: yellow;">arrangement</span> that the
Governor in Council on the recommendation of the Treasurer approves;<o:p></o:p></p>
<p class="MsoNormal"><b><i><span style="background: yellow; font-size: 14.0pt; line-height: 107%; mso-highlight: yellow;">financial arrangement</span></i></b><b><i><span style="font-size: 14.0pt; line-height: 107%;"> </span></i></b><span style="font-size: 14.0pt; line-height: 107%;">covers the more esoteric ways of
making and receiving payments to deliver property. It is not necessary to go
into detail for the purpose of this note.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">Finally,
guarantees are covered by sections 12 to 17. Of note is sec 13<i>:<o:p></o:p></i></span></p>
<p class="MsoNormal"><b>13 <span style="mso-tab-count: 1;"> </span>Statutory
guarantee <o:p></o:p></b></p>
<p class="MsoNormal" style="text-indent: 36.0pt;">(1) This section applies in
relation to the provision to an authority to which this section applies (other
than Victorian Power Exchange, Generation Victoria or National Electricity) of—
<o:p></o:p></p>
<p class="MsoNormal" style="margin-left: 36.0pt; text-indent: 36.0pt;">(a) a
financial benefit or assistance to obtain a financial benefit referred to in
section 5; or <o:p></o:p></p>
<p class="MsoNormal" style="margin-left: 36.0pt; text-indent: 36.0pt;">(b) financial
accommodation— <o:p></o:p></p>
<p class="MsoNormal" style="margin-left: 36.0pt; text-indent: 36.0pt;"><span style="mso-tab-count: 1;"> </span>(i) repealed<o:p></o:p></p>
<p class="MsoNormal" style="margin-left: 72.0pt; text-indent: 36.0pt;">(ii) to which
section 8 or 9 applies, unless the Treasurer executes a guarantee under section
14 in relation to the financial accommodation.<o:p></o:p></p>
<p class="MsoNormal" style="text-indent: 36.0pt;"><span style="mso-spacerun: yes;"> </span>(2) The due satisfaction of amounts payable by
an authority as a result of or in connection with the provision to the
authority of financial accommodation including, without limiting the generality
of the foregoing, the payment of expenses of enforcing or obtaining or
endeavouring to enforce or obtain such satisfaction <span style="background: yellow; mso-highlight: yellow;">is guaranteed by the Government of Victoria</span>.<o:p></o:p></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">The state of
Victoria guarantees the borrowings of LU. That’s it in a nutshell.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">The above is
not intended to be a recommendation. Rather it’s a demonstration of how LU’s
governing act sets out in more detail how the borrowing approval works in Victoria
and the explicit guarantee for LU’s borrowings by the State of Victoria.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">To digress
slightly the La Trobe University Act 2009 also contains a clause relating to
the disposal of land:<o:p></o:p></span></p>
<p class="MsoNormal"><b>37<span style="mso-tab-count: 1;"> </span>
Disposal of land <o:p></o:p></b></p>
<p class="MsoNormal">(1) Without the prior approval of the Minister, the
University must not alienate any land granted in fee simple under section
36(6)(a) whether—<o:p></o:p></p>
<p class="MsoNormal" style="text-indent: 36.0pt;"><span style="mso-spacerun: yes;"> </span>(a) the alienation of the land is in fee
simple or for a lesser estate or interest; or <o:p></o:p></p>
<p class="MsoNormal" style="text-indent: 36.0pt;">(b) the alienation of the land
is— <o:p></o:p></p>
<p class="MsoNormal" style="margin-left: 36.0pt; text-indent: 36.0pt;">(i) total or
partial; or <o:p></o:p></p>
<p class="MsoNormal" style="margin-left: 36.0pt; text-indent: 36.0pt;">(ii) subject
to conditions. <o:p></o:p></p>
<p class="MsoNormal">(2) Subsection (1) does not apply to a leasehold interest
not exceeding 21 years<o:p></o:p></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">That’s just
the first part of the section. It stipulates ministerial approval is needed to
before alienating land. It doesn’t apply to leases less than 21 years. What
about service concession deals like the Spark Living arrangement for 30 years?
Would that be covered? Is that an alienation of land? <span style="mso-spacerun: yes;"> </span>Perhaps it can be picked up as a financial
arrangement that requires the Minister’s approval? Rather than it being the Minister’s
prerogative, perhaps certain dealings could be subject to the approval of
Parliament.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">The UTAS Act
contains a specific clause sec 12 requiring UTAS to furnish the Minister with
an Annual Report which is then tabled in parliament, shortly before being
binned. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">It’s even
less onerous for LU. There is no equivalent clause in LU’s Act. There are
clauses which give the Minister powers to stipulate what reports he/she
requires.<span style="mso-spacerun: yes;"> </span>Parliament currently gets to
see an Annual Report each year, but it doesn’t appear to be a statutory
requirement. When the Chancellor sends the Annual Report to the Minister it is
accompanied with a polite note expressing his pleasure at being able <i>“ to
submit for your information and presentation to Parliament the La Trobe
University Annual Report for the year ending 31 December xxxx.” </i>It’s all a
bit quaint.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">Quaint is
the only way of describing who constitutes LU. It’s not dissimilar to UTAS.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">Sec 4 (3)
spells it out:<i> </i></span><o:p></o:p></p>
<p class="MsoNormal">The University consists of— <o:p></o:p></p>
<p class="MsoNormal" style="text-indent: 36.0pt;">(a) the Council; and <o:p></o:p></p>
<p class="MsoNormal" style="text-indent: 36.0pt;">(b) the staff, other than staff
of any class that is designated from time to time by the Council not to be
staff for the purposes of this section; and <o:p></o:p></p>
<p class="MsoNormal" style="text-indent: 36.0pt;">(c) the graduates; and <o:p></o:p></p>
<p class="MsoNormal" style="text-indent: 36.0pt;">(d) the students; and <o:p></o:p></p>
<p class="MsoNormal" style="text-indent: 36.0pt;">(e) the emeritus professors of
the University<o:p></o:p></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">Thereafter
persons in categories (b), (c), (d), (e) and (f) don’t get a mention in the Act.
They’re just token members. Just like UTAS. Perhaps they’re only there to
prevent universities from being swallowed up by the second tier of government
for government accounting and reporting purposes. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">No-one wants
more bureaucratic entanglements. It’s the issue of transparent control and
meaningful reporting to the owners of public assets which needs to be addressed.
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">As the
Committee is no doubt aware, there is a Bill, the <i>Tasmanian Public Finance
Corporation Amendment Bill 2023</i>, currently before the Lower House which seeks
to amend the <i>Tasmanian Public Finance Corporation Act 1985</i> to provide an
enduring guarantee by the Government of borrowings from Tascorp by relevant
organisations that include: <o:p></o:p></span></p>
<p class="MsoListParagraphCxSpFirst" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14.0pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14.0pt; line-height: 107%;">Government
Business Enterprises; <o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14.0pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14.0pt; line-height: 107%;">State-owned
Companies; and <o:p></o:p></span></p>
<p class="MsoListParagraphCxSpLast" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14.0pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14.0pt; line-height: 107%;">other
Government entities with the current power to borrow. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">The Bill
provides that the guarantee provided to a relevant organisation: <o:p></o:p></span></p>
<p class="MsoListParagraphCxSpFirst" style="mso-list: l1 level1 lfo2; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14.0pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14.0pt; line-height: 107%;">is
subject to individual entity limits established by the Treasurer; <o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l1 level1 lfo2; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14.0pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14.0pt; line-height: 107%;">only
applies to borrowings sourced from Tascorp; <o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l1 level1 lfo2; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14.0pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14.0pt; line-height: 107%;">will
only be called upon after all other options in relation to security held in
respect of guaranteed borrowings have been exhausted; and <o:p></o:p></span></p>
<p class="MsoListParagraphCxSpLast" style="mso-list: l1 level1 lfo2; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14.0pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14.0pt; line-height: 107%;">commences
from 1 July 2023 and applies to all borrowings from Tascorp already in place
and all future borrowings from Tascorp.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">It appears
this will achieve a similar result to the Victorian <i>Borrowing and Investment
Powers Act 1987</i>.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">It certainly
pre-empts the question that if Ministers are required to approve UTAS borrowing
limits then why the same rules shouldn’t apply as contemplated by Tascorp
amendments. Borrow through Tascorp and you’ll be guaranteed. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">When the
Treasurer appeared before the Committee he acted like an equivocating parent,
not sure whether his role in respect of one of his offspring was one of care or
responsibility or both. Whereas UTAS has a more mercenary view and is banking
on Dad opening his wallet if things go bad. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">But if it’s
true that the Tascorp amendments are even partly in response to UTAS current
position, arguably the Treasurer should have been more helpful to the Committee
than his brief appearance which he used to downplay the government’s role in
this critical public policy issue.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">Universities
throughout Australia are coming under increasing scrutiny. Here in Tasmania the
Committee has a unique opportunity to set down a few guidelines for a sensible
way forward.<o:p></o:p></span></p>tasfintalkhttp://www.blogger.com/profile/04012719835733649162noreply@blogger.com1tag:blogger.com,1999:blog-4314112685994399920.post-84650747293238913222023-07-20T18:28:00.003+10:002023-07-20T18:28:33.208+10:00UTAS: In more trouble than Burke and Wills?<p> </p><p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">UTAS is in
more trouble than Burke and Wills.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">The UTAS Council
meeting on 27<sup>th</sup> April 2023 discussed the 2023 financial forecast.
The minutes, reproduced below, make bleak reading.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">The Council <i>“discussed
the challenging conditions facing the University in 2023”</i> and proceeded to
discuss ways <i>“to generate a positive EBITDA in the coming years.” </i>What
that implies is that current projections must show negative EBITDAs.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">The acronym
EBITDA stands for Earnings Before Interest Tax Depreciation and Amortisation, essentially
the cash earnings before interest and depreciation (NB UTAS doesn’t pay tax). It’s
a standard measure of the cash available to service borrowings and to pay for capex
amounts (new buildings say). <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">UTAS’ EBITDA
in 2022 was $30.9 million. To be in negative territory in 2023 reveals an
alarming downturn.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">A business
might break even from a profit perspective, but adding back depreciation and
interest gives a figure for cash earnings.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">If UTAS has
negative cash earnings, it can only survive by running down its investments or
borrowing more. Even if capex spending is zero, it means UTAS is borrowing to
pay interest. Ouch.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">Running down
investment and borrowing more was the plan for financing the Hobart move.
Without that UTAS survival changes would be greater as universities traditionally
have a larger buffer of cash and investments than most in the private sector.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">The minutes suggest
future challenges will start to be addressed in October. This highlights the
nature of UTAS’ business. Whilst others might be able to implement changes
more rapidly, UTAS is tied to the cycle of the academic year. It’s going to
have to live with cash haemorrhaging for the rest of 2023 and hope things can
be put into place post October to take effect before the 2024 academic year.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">The 2022
Annual Report reflected <i>“(t)hese past three years have been among the most
challenging our University has ever faced.” <o:p></o:p></i></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">It’s going
to get worse. Far worse.<span></span></span></p><a name='more'></a><i><o:p></o:p></i><p></p><p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;"><br /></span></p>
<p class="MsoNormal"><i><span style="font-size: 14.0pt; line-height: 107%;"><o:p> </o:p></span></i></p>
<p class="MsoNormal"><b>Extract from minutes of UTAS Council meeting 27<sup>th</sup>
April 2023 <o:p></o:p></b></p>
<p class="MsoNormal"><b>3.4 *2023 Financial Forecast and Strategic Questions <o:p></o:p></b></p>
<p class="MsoNormal">University Council <span style="background: yellow; mso-highlight: yellow;">discussed the challenging conditions facing the
University in 2023</span> including a decline in student numbers, the removal
of the CGS Guarantee in 2024 and intense competitive pressures in the economy
and the sector and the resulting financial consequences for the 2024 – 2026
period. Members considered a range of potential options and actions consistent
with the agreed right-sized modelling for the University <span style="background: yellow; mso-highlight: yellow;">in order to generate a positive
EBITDA in the coming years.</span> <o:p></o:p></p>
<p class="MsoNormal">In considering the proposed actions to address the funding
challenges, the following aspects were raised in discussion: <o:p></o:p></p>
<p class="MsoListParagraphCxSpFirst" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]-->Members encouraged exploring untapped
opportunities for the University to partner with industry, government, and
community to plan for future Tasmania. <o:p></o:p></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]-->Noting the trends in growth and decline across a
variety of degree offerings over time, the question of size, scale and what
right-size might mean for the University was considered. <o:p></o:p></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]-->Council noted that the results of the national
student experience survey data indicated that the University of Tasmania had
higher score in overall student satisfaction than any Group of Eight
university.<o:p></o:p></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="mso-spacerun: yes;"> </span>Members
discussed options for the University to take advantage of its distinctiveness
to compete against strong sector competition, through promoting distinctive
course offerings and experiences for students.<o:p></o:p></p>
<p class="MsoListParagraphCxSpLast" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]-->Consideration of options to address the funding challenges
would remain a priority for Council, to be agreed before the strategic planning
process in October. Council noted that management would be preparing a paper on
financial modelling including proposed funding options for consideration at the
June Council meeting. <o:p></o:p></p>
<p class="MsoNormal"><b>Resolution 27-04-2023-UC-3.4(1)<o:p></o:p></b></p>
<p class="MsoNormal">University Council <b><u>noted</u></b> the challenging
conditions facing the University in 2023 and the financial consequences for the
2024 – 2026 period<o:p></o:p></p>tasfintalkhttp://www.blogger.com/profile/04012719835733649162noreply@blogger.com1tag:blogger.com,1999:blog-4314112685994399920.post-75813414559880590992023-07-19T13:46:00.001+10:002023-07-19T13:47:04.138+10:00UTAS: The State government's role Part 2<p> </p><p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%; mso-no-proof: yes;">(</span><i><span style="font-size: 12pt; line-height: 107%; mso-no-proof: yes;">Apart from the three introductory paragraphs, this blog was sent as a
supplementary sumission to the Legislative Council’s Inquiry into Provisions of
the University of Tasmania Act 1992.)</span></i><span style="font-size: 14pt; line-height: 107%; mso-no-proof: yes;"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%; mso-no-proof: yes;">Maybe it was a coincidence or maybe it was intended. UTAS dumped a huge
cache of documents and minutes on its website which related to its intended
move into the Hobart CDB just days after the Legislative Council inquiry met
with Treasurer Michael Ferguson on the 6<sup>th</sup> July 2023, thereby resticting
the sorts of question he would otherwise have faced, essentially about <span style="mso-spacerun: yes;"> </span>the role of the State government in UTAS’
affairs.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">The data
dump can be found</span> <a href="https://www.utas.edu.au/about/campuses/southern-transformation/building-our-hobart-university-presence-since-2007?fbclid=IwAR29ApNl_g2op57EOd5dH0uk1XPcPXMWALFqB5h1s8PQ7lcT5ww5zMOoEF4">HERE.</a></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%; mso-no-proof: yes;">Pursuant to sec 7(2) of the UTAS Act the Treasurer needs to give UTAS
approval before it undertakes any borrowings. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%; mso-no-proof: yes;">The previous blog on this site explored some of the issues around UTAS’
borrowings following the Treasurer’s brief appearance, what it means for the
State governemnt and we as Tasmanians, and what the Treasurer knew/didn’t know/should
have known/ignored about UTAS.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%; mso-no-proof: yes;">This blog attempts to fill in some of the missing pieces of the puzzle
gleaned from the new information in the public domain.<span></span></span></p><a name='more'></a><span style="font-size: 14pt; line-height: 107%; mso-no-proof: yes;"><o:p></o:p></span><p></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%; mso-no-proof: yes;">At the UTAS Council meeting of April 5<sup>th</sup> 2019 Agenda item 6
covered future plans in the south of the state. Council approved <o:p></o:p></span></p>
<p class="MsoListParagraphCxSpFirst" style="mso-list: l5 level1 lfo7; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol; mso-no-proof: yes;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 107%;">the
'City-Centric Campus' model as a basis for the future development of the
University's Southern Campuses <span style="mso-no-proof: yes;">(with one
dissenter)<span style="mso-spacerun: yes;"> </span></span><span style="mso-spacerun: yes;"> </span><span style="mso-no-proof: yes;"><o:p></o:p></span></span></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l5 level1 lfo7; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol; mso-no-proof: yes;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 107%;">setting
up a new entity to sell surplus Sandy Bay assets.<span style="mso-no-proof: yes;"><o:p></o:p></span></span></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l5 level1 lfo7; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol; mso-no-proof: yes;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 107%;">a
sequence for transitioning into the Hobart CDB, and<span style="mso-no-proof: yes;"><o:p></o:p></span></span></p>
<p class="MsoListParagraphCxSpLast" style="mso-list: l5 level1 lfo7; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol; mso-no-proof: yes;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 107%;">a
Southern Infrastructure Funding Strategy.<span style="mso-no-proof: yes;"><o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%; mso-no-proof: yes;">It’s the funding strategy <span style="mso-spacerun: yes;"> </span>(Agenda
item 6.4) that is of most relevance to the Committee’s inquiry.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%; mso-no-proof: yes;">The minutes noted the discussion included:<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpFirst" style="margin-left: 38.25pt; mso-add-space: auto; mso-list: l0 level1 lfo5; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-bidi-font-style: italic; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><i><span style="font-size: 14pt; line-height: 107%;">The Funding Strategy assumptions effectively describe the “right size”
for the University in terms of student numbers and mix between domestic and
international, as well as staff numbers and ratios (staff/student and
academic/professional), although it was noted that the average ratios do not
convey the mix of class sizes that will be a feature of future differentiated
offerings. Similarly, the number of international students does not describe
the intention to change the mix of international students and target areas
where the University is seeking to expand capabilities within the State. <o:p></o:p></span></i></p>
<p class="MsoListParagraphCxSpMiddle" style="margin-left: 38.25pt; mso-add-space: auto; mso-list: l0 level1 lfo5; text-indent: -18pt;"><a name="_Hlk140580079"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-bidi-font-style: italic; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><i><span style="font-size: 14pt; line-height: 107%;">The sale and leaseback option has been recommended on the basis that the
University </span></i></a><a name="_Hlk140591675"><span style="mso-bookmark: _Hlk140580079;"><i><span style="font-size: 14pt; line-height: 107%;">does not
currently have </span></i></span></a><a name="_Hlk140640043"><span style="mso-bookmark: _Hlk140580079;"><span style="mso-bookmark: _Hlk140591675;"><i><span style="font-size: 14pt; line-height: 107%;">the financial capacity to borrow all
the funds for this investment </span></i></span></span></a><span style="mso-bookmark: _Hlk140640043;"><span style="mso-bookmark: _Hlk140580079;"><i><span style="font-size: 14pt; line-height: 107%;">while also retaining the financial
flexibility to manage potential financial shocks</span></i></span></span><span style="mso-bookmark: _Hlk140580079;"><i><span style="font-size: 14pt; line-height: 107%;">. </span></i></span><i><span style="font-size: 14pt; line-height: 107%;">This
option <a name="_Hlk140586530">involves a lower level of financial risk </a>for
the University. <o:p></o:p></span></i></p>
<p class="MsoListParagraphCxSpMiddle" style="margin-left: 38.25pt; mso-add-space: auto; mso-list: l0 level1 lfo5; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-bidi-font-style: italic; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><i><span style="font-size: 14pt; line-height: 107%;"><span style="mso-spacerun: yes;"> </span>The sale and leaseback option
enables <a name="_Hlk140587991">the University’s capital to be applied to other
activities with a potentially higher rate of return than a property investment</a>,
while also enabling the University access to the economies of scale that a
large institutional investor could bring to the construction of the facility. <o:p></o:p></span></i></p>
<p class="MsoListParagraphCxSpMiddle" style="margin-left: 38.25pt; mso-add-space: auto; mso-list: l0 level1 lfo5; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-bidi-font-style: italic; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><i><span style="font-size: 14pt; line-height: 107%;">The experience with the PBSA on Melville St highlights the need to
clarify in a sale and leaseback contract the ability of the University to
control how it intends to utilise the building. <o:p></o:p></span></i></p>
<p class="MsoListParagraphCxSpLast" style="margin-left: 38.25pt; mso-add-space: auto; mso-list: l0 level1 lfo5; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-bidi-font-style: italic; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><i><span style="font-size: 14pt; line-height: 107%;">The contract needs to specify how the building will be refurbished over
time to maintain fit-for-purpose facilities and provide the University with
options to either extend the lease or purchase the property outright at
conclusion of the initial term. <o:p></o:p></span></i></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%; mso-no-proof: yes;">Council then approved, again as per the minutes:<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpFirst" style="mso-list: l1 level1 lfo6; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-bidi-font-style: italic; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><i><span style="font-size: 14pt; line-height: 107%;">proceeding to the planning phase of the proposed funding strategy 1(a),
which comprises: sale and leaseback for the Science, Technology, Engineering
and Mathematics (STEM) building and central library; establishment of debt
facilities; <a name="_Hlk140643006">partial utilisation of the University's
investment portfolio </a>and partial value realisation of surplus property.<o:p></o:p></span></i></p>
<p class="MsoListParagraphCxSpLast" style="mso-list: l1 level1 lfo6; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-bidi-font-style: italic; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><i><span style="font-size: 14pt; line-height: 107%;">delegation of authority to the Vice-Chancellor to engage as advisers for
the sale and leaseback transaction via direct negotiation, subject to
undertaking independent market testing</span></i>.<i><span style="font-size: 14pt; line-height: 107%;"><o:p></o:p></span></i></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">The
Treasurer told the Committee if “the<i> university took on a property that it
didn't own and leased it on a long-term lease, it would also be a recognised
accounting liability rather than borrowing.”</i> That is correct. But the
proposed sale and leaseback of the STEM building includes a large element of control
over the property and an interest in the property at the end of the lease.
Which makes the arrangement, not so much an operating lease in the standard
landlord/tenant sense, but a service concessional asset like the PBSA
arrangement with Spark Living. Which in turn make it a borrowing like
arrangement which should fall under the purview of the Treasurer, regardless of
whether his role is one of oversight (Treasurer Ferguson’s view) or a wider
role to manage the economic and fiscal risks of the State (the view of former
Premier/Treasurer Peter Gutwein).<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">It was noted
“<i>The sale and leaseback option has been recommended on the basis that the
University does not currently have the financial capacity to borrow all the
funds <a name="_Hlk140581012">for this investment </a>while also retaining the
financial flexibility to manage potential financial shocks.”</i> The absence of
an Oxford comma after the words “…<i>for this investment” </i>and the
subsequent inclusion of the word<i> “also” suggests</i> UTAS couldn’t borrow
the funds needed <u>and </u>it lacked the financial flexibility to manage
future shocks. How a sale and leaseback arrangement would address the second
concern is not obvious. Neither is it obvious how it “<i>involves a lower level
of financial risk”. </i>An investor would require a higher rate of return than
the cost of funds from say Tascorp. Unless the fate of the building at the end
of the lease agreement was pre-determined, an investor would require an even
greater return to compensate for the risk of being left with a purpose-built
building becoming a stranded asset. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">So how
exactly will the financial risks of a purpose-built building, a core component
of the CDB relocation, be minimised with a sale and leaseback arrangement? An investor
imbued with the knowledge that UTAS couldn’t raise funds elsewhere would surely
charge more? Or is UTAS proposing a sale and leaseback arrangement with the
Sisters of Charity?<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">Enabling “<i>the
University’s capital to be applied to other activities with a potentially
higher rate of return than a property investment” </i>might sound like a good
idea but when its core activities of teaching and learning produce losses,
increasing the losses with extra rents seems an odd move.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">Delivering
public goods via the increased leverage of public assets is something
consultants chant as if it were a holy mantra. It was the likely rationale for
the PSBA arrangements with Spark Living. Build or otherwise acquire
accommodation, hunt the globe for students, forward sell the rents via a
service concession arrangement, use the cash to build more. If new buildings
are required, then build them. Forward selling the rents may not work as the buildings
are for self-use. Do a sale and leaseback arrangement instead. It’s just
another service concession arrangement, but never mind, it’ll raise the cash we
need.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">That it was
a plan with a lot of Ponzi like characteristics became even more apparent when
Covid had such a dramatic impact. The discussion in the minutes (pre Covid)
alluded to UTAS lacking the financial flexibility to manage potential financial
shocks. What did it do? It went ahead regardless. The science of risk analysis
owes its existence to the reality that salad days don’t last forever. What may
be a good idea can soon develop into a disaster as the University of Wollongong
will attest.<a href="file:///C:/Users/John%20&amp;%20Julie/Documents/articles/230719%20utas%20reflectioms%20no%202.docx#_ftn1" name="_ftnref1" style="mso-footnote-id: ftn1;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[1]</span></span><!--[endif]--></span></span></a> <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">The possible
“<i>economies of scale that a large institutional investor could bring to the
construction of the facility” </i>is listed as a possible outcome of a sale and
leaseback arrangement. Dealing with one investor may be preferable to dealing
with a multitude but didn’t UTAS ignore that maxim when it subsequently raised
$350 million via a bond issue to multiple investors. Perhaps there was a silver
lining to the bond issue. Bond investors don’t hold security which would have
been a blessing for UTAS. Their place in the queue is right behind secured
lenders.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">It’s
difficult to imagine what economies of scale investors bring to construction,
given that UTAS requires control over the specifications of its purpose-built facility.
Builders provide economies of scale, if any. Investors provide the dough.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">The minutes
state that UTAS didn’t<i> “have the financial capacity to borrow all the funds
for this investment.”</i> What has long been suspected and what this latest
admission all but spells out is that Tascorp was not prepared to lend on the
terms UTAS wanted. Tascorp has always erred on the side of caution. It must pay
more than just lip service to the economic and fiscal risks facing the State. It
would have wanted security which would have constrained what UTAS planned to
do. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">Tascorp
wouldn’t have been impressed with UTAS’s plans for the future of the southern
campuses if the summary of the discussion points listed in the minutes of April
5<sup>th</sup> 2019 are anything to go by. It is clear the arguments were
heavily loaded in favour of the City-Centric Campus option rather than
remaining at Sandy Bay. The discussion points in the minutes could well go down
as the first set produced by ChatGTP software after a computer was fed a select
diet of consultants’ reports. A copy of the minutes is pasted at the end of this
note.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">There were
so many unknowns from a financial viewpoint, that even if Tascorp assessed UTAS
as having sufficient collateral, which it undoubtedly had, financing a plan
which contained more questions than answers, for a large property development project
run by novices, would mean having to turn a blind eye to prudence.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">UTAS’
funding strategy has revolved around raising funds without having to pledge too
many assets as collateral which would tie its hands as the uncertain. largely
secretive transition into the Hobart CDB gradually unfolded.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">In the past UTAS
was always able to raise sufficient funds via Tascorp on an unsecured basis,
signing a Master Loan agreement which required it to always maintain a level of
cash and investments at least equal to the level of borrowings. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">But that wouldn’t
have been enough to fund all the Hobart transformation plans because as the
minutes disclosed “<i>partial utilisation of the University's investment
portfolio” </i>was needed. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">Raising cash
by forward selling future rents, the service concession asset approach, started
two years earlier in 2017. More was in the pipeline. Another tranche was raised
in 2020 but then Covid intervened. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">But now we
know the sale and leaseback variation for UTAS major assets in the Hobart CDB,
the STEM building and library, was also underway having been approved in April
2019.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">Even more
funds were needed but Tascorp were reluctant lenders, certainly under the terms
required by UTAS.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">Whether the
sec 7(2) borrowing approval which enabled UTAS to raise funds from third party
investors specifically allowed for the $350 million bond issue is not known.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">What we do
know, from Professor Black’s evidence to the Committee is that he regards UTAS
as a State entity meaning he believes the State will step in if UTAS runs into
difficulty.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">Moody’s gave
UTAS the same credit rating as the State, so whilst UTAS might not formally be
a State institution Prof Black believes there is an implicit guarantee from the
State, as indeed there is with States where, if they get into trouble, they can
in turn expect a bail out from the Feds.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">But it far
from clear which level of government would be first to attend the scene of any
accident. As a Treasury official told the Committee:<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: 36pt;"><i><span style="font-size: 14pt; line-height: 107%;">“As the Treasurer said, there is no liability to the state
from the university. Obviously, the council is the governing body. I think this
has been raised previously in the rating that Moody's did for the university.
They implied a level of support from the Commonwealth government for the
university. They would provide extraordinary support from the Commonwealth in
the event of the situation that you have described. The caution with this is
that Moody's generally adopts that standard view when they are rating both
state and public institutions. You only have to look at Tasmania's rating from
Moody's and you will see a similar clause in there.”<o:p></o:p></span></i></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">What that
all means is this: Tasmania’s credit rating is as high as it is because the
Feds will bail us out in an emergency. We might have to suffer a bit of pain,
hence the rating is not quite as high as the Fed’s rating. UTAS has the same
rating as the State which suggests we are treated like Siamese twins. If the
State doesn’t come to the party, the Feds will. No matter what UTAS does, it
will always be bailed out – by someone. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">For UTAS to
be aware it doesn’t have “<i>the financial capacity to borrow all the funds for
this investment while also retaining the financial flexibility to manage
potential financial shocks” </i>whilst it ploughs on regardless, comforted by the
presumption it is too big to fail and will always be bailed out, is gobsmacking
brazen arrogance.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">At the risk
of heresy, that is not a sound basis for public policy making.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">There is no
doubt that anything UTAS does can easily have ramifications for the State, for
the State’s credit rating which then affects the whole operations of the Total State
sector which currently is locked into a pattern of cash and fiscal deficits now
occurring in a higher interest rate environment with monotonous regularity. and
which can only be funded by more borrowings.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">Even if the
Feds assist it won’t be a free lunch.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">That is the
context the Committee should use when assessing the role of the government in
UTAS’ affairs.<o:p></o:p></span></p>
<p class="MsoNormal"><b><span style="font-size: 16pt; line-height: 107%;">Attachment:
Extract from UTAS Council minutes 5<sup>th</sup> April 2019 <o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-size: 14pt; line-height: 107%;">(these
are the Agenda Items 6.1 to 6.3 which preceded item 6.4 Southern Infrastructure
Funding Strategy<o:p></o:p></span></b></p>
<p align="center" class="MsoNormal" style="text-align: center;"><b>Southern Futures<o:p></o:p></b></p>
<p class="MsoNormal">………(redacted)………joined the meeting at 11.15am.<o:p></o:p></p>
<p class="MsoNormal"><b>6.1<span style="mso-tab-count: 1;"> </span>*Future
of the Southern Campuses<o:p></o:p></b></p>
<p class="MsoNormal">Each member of Council provided a response to the papers an
recommendations in relation to the future of the southern campuses (including a
pre-recorded video from Mr Gregg), Discussion included:<o:p></o:p></p>
<p class="MsoListParagraphCxSpFirst" style="mso-list: l4 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]-->The location of the University in Sandy Bay
stems from an era when Universities were intentionally located outside of city
centres to provide an “interval” between school and work life. As higher
education has expanded and knowledge become ever more central to contemporary
societies and economies, there is a strong case for a university to be embedded
within and contribute to the community as articulated through the city-centric
model.<o:p></o:p></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l4 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]-->One of the key benefits of the city-centric
model is considered to be greater accessibility to facilitate student
participations, while enhanced opportunities for collaboration and a close connection
with industry and the community under this option was also highlighted.<o:p></o:p></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l4 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]-->A case for remaining at Sandy Bay was strongly
made built around the distinctive experience aligned with our strategy that it
offered, and the sense of community built around the current campuses.<o:p></o:p></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l4 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]-->The emotional attachment and appeal of the
campus to those who studied there was noted.<o:p></o:p></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l4 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]-->The accuracy of elements of the data was
questioned by some, while others offered the view that even if there were
issues with some parts of the data, it was quite sufficient for the purposes of
the decisions to made. <o:p></o:p></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l4 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="mso-spacerun: yes;"> </span>It was
noted that the move to a city-centric model began a number of years ago when
the University started to relocate facilities into the Hobart Central Business
District (CBD). The adoption of the citycentric model is a continuation of
these earlier decisions. <o:p></o:p></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l4 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="mso-spacerun: yes;"> </span>A range
of feedback has been received by Council members from staff, students and
external stakeholders in relation to the two options. The view of students was
that a city campus location was more attractive if the issues of parking and
transport could be successfully addressed. <o:p></o:p></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l4 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]-->Location of the University in the city provides
greater opportunity to highlight the contribution of knowledge to the success
of the city and its community. <o:p></o:p></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l4 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="mso-spacerun: yes;"> </span>Concerns
were noted in relation to the costs and disruption for staff and students that
would be involved in refurbishing and relocating facilities on the Sandy Bay
campus as part of the distributed model. <o:p></o:p></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l4 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]-->The establishment of new facilities in a new
location will provide greater opportunity for innovation in learning and
teaching. <o:p></o:p></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l4 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="mso-spacerun: yes;"> </span>A key to
the success of the city-centric model will be the establishment of a campus
heart, while the University’s vision for learning and teaching as part of the city-centric
model also requires clear articulation. <o:p></o:p></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l4 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]-->Transport and parking issues are highly
important for staff and students under either option, and there is a need for
the University to address these without relying on a resolution from the State
or Council. <o:p></o:p></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l4 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]-->There were concerns of adverse reputational
impacts and challenges in gaining community support if the University chooses
to adopt the city-centric campus model. <o:p></o:p></p>
<p class="MsoListParagraphCxSpLast" style="mso-list: l4 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]-->The benefit of the proposal to involve third
parties in the provision of University infrastructure and the establishment of
a separate subsidiary to manage surplus property needs to be compared to the
benefit of managing these activities within the University’s existing
structures and resources.<o:p></o:p></p>
<p class="MsoNormal">Council members commended the quality and comprehensiveness
of the materials provided to Council to enable an informed decision to be made.
The approach to engage staff, students and stakeholders in consideration of the
two options was also commended and Council thanked all those involved in
preparing these materials.<o:p></o:p></p>
<p class="MsoNormal"><b>05-04-2019_UC_9467-5202<o:p></o:p></b></p>
<p class="MsoNormal">Council approved the business case which supports <a name="_Hlk140572763">the 'City-Centric Campus' model as a basis for the future
development of the University's Southern Campuses</a>.<o:p></o:p></p>
<p class="MsoNormal">…….(redacted)…………. requested that his objection to the
motion be recorded in the minutes. <o:p></o:p></p>
<p class="MsoNormal">Management provided an outline of the communication plan in
relation to the decision, with communication to staff and students to commence
later in the afternoon. <o:p></o:p></p>
<p class="MsoNormal"><b>6.2 * Framework for managing surplus University property<o:p></o:p></b></p>
<p class="MsoNormal">……(redacted)…………. joined the meeting at 12.45pm. <o:p></o:p></p>
<p class="MsoNormal">Discussion included:<o:p></o:p></p>
<p class="MsoListParagraphCxSpFirst" style="margin-left: 38.25pt; mso-add-space: auto; mso-list: l2 level1 lfo2; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]-->Under the proposal to establish a separate
entity to manage surplus property, Council would specify the objectives of the
entity in its constitution and through this would determine the direction,
values, policies and risk appetite that would apply to the entity. The
Directors would ensure management of the entity would manage the University’s
surplus property in accordance with these directions. <o:p></o:p></p>
<p class="MsoListParagraphCxSpMiddle" style="margin-left: 38.25pt; mso-add-space: auto; mso-list: l2 level1 lfo2; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]-->Council would determine which properties would
be managed by the entity, establish design principles to be followed and
approve proposed master plans for these properties, including any associated
requirements or constraints. <o:p></o:p></p>
<p class="MsoListParagraphCxSpMiddle" style="margin-left: 38.25pt; mso-add-space: auto; mso-list: l2 level1 lfo2; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="mso-spacerun: yes;"> </span>A
separate subsidiary is considered the optimum structure to mitigate the
University’s exposure to development-related risks as well as being more
attractive to external counterparties who would prefer to deal directly with a
specialist entity focused on property management. <o:p></o:p></p>
<p class="MsoListParagraphCxSpLast" style="margin-left: 38.25pt; mso-add-space: auto; mso-list: l2 level1 lfo2; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]-->Costs related to management of the entity would
be contained through engaging project teams for a fixed term to deliver
specific projects.<o:p></o:p></p>
<p class="MsoNormal" style="margin-left: 20.25pt;">………(redacted)……… left the
meeting at 1.05pm. <o:p></o:p></p>
<p class="MsoNormal"><b>05-04-2019_UC_7135-5203 <o:p></o:p></b></p>
<p class="MsoNormal">Council approved <o:p></o:p></p>
<p class="MsoListParagraphCxSpFirst" style="margin-left: 56.25pt; mso-add-space: auto; mso-list: l6 level1 lfo3; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]-->The proposed approach for managing the
University's surplus property assets. <o:p></o:p></p>
<p class="MsoListParagraphCxSpLast" style="margin-left: 56.25pt; mso-add-space: auto; mso-list: l6 level1 lfo3; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]-->The establishment of a new entity (wholly-owned
by the University) for managing the University's surplus property assets. <o:p></o:p></p>
<p class="MsoNormal"><b>05-04-2019_UC_7135-5204</b> <o:p></o:p></p>
<p class="MsoNormal">Council noted the intention that future Council approval
will be sought in respect to the new entity’s constitution, appointment of
Directors and the transfers of specific land holdings to the new entity. <o:p></o:p></p>
<p class="MsoNormal">…………(redacted)……left the meeting at 1.30pm. <o:p></o:p></p>
<p class="MsoNormal"><b>6.3 * Sequence of transitioning into the Hobart Central
Business District (CBD)</b> <o:p></o:p></p>
<p class="MsoNormal">Discussion included: <o:p></o:p></p>
<p class="MsoListParagraphCxSpFirst" style="margin-left: 38.25pt; mso-add-space: auto; mso-list: l3 level1 lfo4; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]-->The establishment of a student hub with study
spaces in the Hobart CBD is considered a priority, noting that the construction
of the Purpose-Built Student Accommodation (PBSA) on the old Red Cross site
will include considerable ground floor space for student facilities. <o:p></o:p></p>
<p class="MsoListParagraphCxSpLast" style="margin-left: 38.25pt; mso-add-space: auto; mso-list: l3 level1 lfo4; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="mso-spacerun: yes;"> </span>Potential
opportunities to utilise the former Forestry Building early in the transition
process, as well as the optimal transition timing for specific disciplines to
minimise student disruption, will be considered as part of the development of
the master plan.<o:p></o:p></p>
<p class="MsoNormal"><b><span style="mso-spacerun: yes;"> </span>05-04-2019_UC_8136-5205<o:p></o:p></b></p>
<p class="MsoNormal"><span style="mso-spacerun: yes;"> </span>Council approved the
proposed sequencing of relocation to the Hobart Central Business District.<o:p></o:p></p>
<div style="mso-element: footnote-list;"><!--[if !supportFootnotes]--><br clear="all" />
<hr align="left" size="1" width="33%" />
<!--[endif]-->
<div id="ftn1" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="file:///C:/Users/John%20&amp;%20Julie/Documents/articles/230719%20utas%20reflectioms%20no%202.docx#_ftnref1" name="_ftn1" style="mso-footnote-id: ftn1;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[1]</span></span><!--[endif]--></span></span></a>
Referred to in the previous blog<o:p></o:p></p>
</div>
</div>tasfintalkhttp://www.blogger.com/profile/04012719835733649162noreply@blogger.com0tag:blogger.com,1999:blog-4314112685994399920.post-31891824119143462042023-07-17T15:05:00.001+10:002023-07-17T15:05:55.497+10:00UTAS: The State government's role<p> </p><p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The following are comments which
formed part of a supplementary submission to the Legislative Council Inquiry </span><span style="font-size: 14.0pt; line-height: 107%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">into the Provisions of the University of Tasmania Act 1992<b> </b>following
</span><span style="font-size: 14.0pt; line-height: 107%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Treasurer Michael Ferguson’s
appearance before the Committee on 6<sup>th</sup> July 2023 <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The Treasurer’s brief appearance highlighted
some of the relevant issues relating to the State Government’s role. The issues
canvassed here include:<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpFirst" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14.0pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14.0pt; line-height: 107%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Ownership and/or
control of UTAS’s assets<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14.0pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14.0pt; line-height: 107%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The reason for
Sec 7(2), the need for UTAS to obtain the Treasurer’s approval before borrowing.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><a name="_Hlk140496209"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14.0pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14.0pt; line-height: 107%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Borrowing like
arrangements: </span></a><span style="font-size: 14.0pt; line-height: 107%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">service
concession deals.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14.0pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14.0pt; line-height: 107%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Borrowing like
arrangements: other.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpLast" style="mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14.0pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14.0pt; line-height: 107%;">The
University of Wollongong (UOW) experience: A cautionary tale.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The notes were prepared to assist the Committee
understand the financial issues facing UTAS. They were prepared before the
massive data dump by UTAS of documents, Council minutes etc relating to UTAS proposed
relocation to Hobart CDB which occurred after the Treasurer’s Committee hearing,
which conveniently meant the Committee was unable to chase up some interesting
leads about funding the CDB move and what it may mean for UTAS, the state
government and for all Tasmanians. An up coming blog will cover the more
interesting revelations.<span></span></span></p><a name='more'></a> <o:p></o:p><p></p>
<p class="MsoNormal"><b><span style="font-size: 14.0pt; line-height: 107%;">Ownership
and/or control of UTAS’s net assets<o:p></o:p></span></b></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">The
Treasurer told the Committee:<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: 36.0pt;"><i><span style="font-size: 14.0pt; line-height: 107%;">“It is important to note that while created by state
legislation, the university is not owned by the government, it is not a state
entity within the Total State Sector and therefore does not sit on government
balance sheets.”<o:p></o:p></span></i></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">He went on
to say:<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: 36.0pt;"><i><span style="font-size: 14.0pt; line-height: 107%;">“The university is established as an institution under state
legislation. That's not remarkable or unusual. There are a number of other
organisations that are established in state and federal legislation. It
shouldn't be taken to mean that they are part of the Crown or part of the state
sector or the federal government sector. One quick example is some of the
residential colleges in Hobart. Even part of the Anglican Diocese in some cases
has rules set out in state legislation, even though it's not part of the state.”<o:p></o:p></span></i></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">The
question…” <i>if the university were in a position of having to wrap itself up
because it was financially in a pickle, who would own its assets”.....</i>went
unanswered. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">UTAS’ assets
are public assets. The reason UTAS isn’t part of the Total State Sector comes
back to the matter of control. Who controls an asset will often determine where
it appears in financial statements. A large amount of forestry land for
instance is owned by the Crown, not Sustainable Timbers Tasmania P/L, yet
because STT controls the land it’s an asset of STT (The fact that STT ascribes
a nil value to that land is a separate issue).<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">UTAS may
have been created by state legislation and the State may appoint some members
to the governing Council but arguably there isn’t the level of control that
would warrant UTAS being included in the Total State Sector.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">Do we
continue to turn a blind eye to the issue of who owns and controls UTAS? Or
should the issue be resolved and formalised. Currently the reality is that UTAS
assets are public assets largely controlled by<span style="mso-spacerun: yes;">
</span>a self-perpetuating clique who control appointments to University Council.<o:p></o:p></span></p>
<p class="MsoNormal"><b><span style="font-size: 14.0pt; line-height: 107%;">To whom
does UTAS report?<o:p></o:p></span></b></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">It was
noticeable that the question…” <i>If it's not a state entity then who is the
university reporting to</i>?”…. went unanswered. There is little doubt the
question is a corollary to Who owns UTAS?<o:p></o:p></span></p>
<p class="MsoNormal"><b><span style="font-size: 14.0pt; line-height: 107%;">The
reason for Sec 7(2)<o:p></o:p></span></b></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">The
Treasurer was far from clear on this matter. At one stage he said:<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: 36.0pt;"><i><span style="font-size: 14.0pt; line-height: 107%;">“To the extent that the state plays a role, other than
through the legislation's section 7(2), gives the Treasurer a defined role. It
is a significant responsibility to not be too mean in terms of keeping the
limit too low and, therefore, constrain what the university's growth
opportunities or transformation opportunities might be, but also not too high
so as to prevent the university from going too far into borrowings that it
might struggle to be able to service.”<o:p></o:p></span></i></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">The
Treasurer suggested Sec 7(2) was only inserted into the Act as a double-checking
mechanism. When the Act became law in 1992 no one imagined UTAS would need to
borrow much. Its borrowings were next to nil. In 1996 for instance, they were
only $300k, essentially an overdraft.<span style="mso-spacerun: yes;"> </span>That’s
the way UTAS was run back then. Borrowing from anyone but Tascorp wouldn’t have
been envisaged. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">Tascorp
began life in 1985 as a statutory corporation. It didn’t become a GBE until
1995, the year the GBE Act became law. Tascorp was the first GBE. Hydro and Forestry
Tasmania (FT) came later on in the 1990’s. State Owned Corporations (SOCs) came
much later. Corporatised public businesses borrowing from third party lenders
was not on anyone’s radar when the UTAS Act was passed in 1992. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">The
following question and answer was telling:<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: 36.0pt;"><i><span style="font-size: 14.0pt; line-height: 107%;">Ms WEBB - Do you see that the Treasurer's role as outlined in
the act, section 7(2), inherently holds a responsibility to protect the
interests of the university and also to protect the interests of the state?
That is the starting point of the question.<o:p></o:p></span></i></p>
<p class="MsoNormal" style="margin-left: 36.0pt;"><i><span style="font-size: 14.0pt; line-height: 107%;"><span style="mso-spacerun: yes;"> </span>Mr FERGUSON - I think
more of the former and less of the latter. I think the legislators back in
1992, potentially sooner in earlier versions of the act that establishes the
university, made a decision that in granting the design of the governance and
the level of autonomy the University Council would have, there would still need
to be an external third party - the Treasurer of Tasmania - to have a
particular role or a right or a responsibility to ensure that before the
university engages in borrowings, the third-party reference through the
Treasurer who, Liberal, Labor or Independent at whatever point in time, would
be taking advice from Treasury about what is a prudent level of borrowings. To
the extent that it is about protecting the state, I would see that as part of
the story, perhaps, but the less important of those two. It's really about
ensuring that the university is in a strong financial position and is able to
borrow. It is important for organisations to be able to borrow in order to
develop capital infrastructure that will be enjoyed by future generations and
be able to service those borrowings in a way that's fair for the current
generation so that the current generation doesn't have to bear all of the costs
of an asset that will be enjoyed by future people, students, members of the
university.<o:p></o:p></span></i></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">When pressed
about making a Sec 7(2) decision was the Treasurer looking after the interest
of the State or UTAS he said:<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: 36.0pt;"><i><span style="font-size: 14.0pt; line-height: 107%;">“ I don't disagree with what you're saying and I thoroughly
agree with your comment that the Treasurer, in making his or her decision on
these matters, is making decisions that are in the interests of the state. I
certainly endorse that view. But it's really about a third-party oversight of
the level of borrowings.”<o:p></o:p></span></i></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">It’s
primarily an oversight role. That was Treasurer Ferguson’s view.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">Former
Premier /Treasurer Peter Gutwein appeared to have a different view, this from a
letter to UTAS dated 29<sup>th</sup> Oct 2020 obtained under RTI.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;"><o:p></o:p></span></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiM3_eAYpp_E51SVlhWwTEz6noGmE1bCm7ZVl6GoZP2IhwGp7tJea1Mf8jocXrxuV_vLTjvC711vlw9sfSjFEy4QUeQ7LdqhkrpVyy_i274_gN5cklygruxwGx0RSPnTg9r0rXLxqEjVH1AenPbLYNfMXJnqmAdemCB0msrXnHmuqv8TDAjRlonAKzk2ltH/s724/utas7.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="724" data-original-width="602" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiM3_eAYpp_E51SVlhWwTEz6noGmE1bCm7ZVl6GoZP2IhwGp7tJea1Mf8jocXrxuV_vLTjvC711vlw9sfSjFEy4QUeQ7LdqhkrpVyy_i274_gN5cklygruxwGx0RSPnTg9r0rXLxqEjVH1AenPbLYNfMXJnqmAdemCB0msrXnHmuqv8TDAjRlonAKzk2ltH/s16000/utas7.png" /></a></div><br /><div class="separator" style="clear: both; text-align: center;"><br /></div><p></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">The letter
mentions economic and fiscal risks to the State. That seems to be more than
just an oversight role to ensure UTAS doesn’t get into trouble. (NB the
sentence mentioning other debt like obligations was also highlighted – see below
comments on the subject).<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">To suggest as
Treasurer Ferguson did, that legislators in 1992 drafted sec 7(2) to allow UTAS
to borrow from external third parties is an ex-post rationalisation. If
legislators were that prescient, they probably would have widened the
definition of borrowings to include borrowing like arrangements.<o:p></o:p></span></p>
<p class="MsoNormal"><a name="_Hlk140150193"><b><span style="font-size: 14.0pt; line-height: 107%;">Borrowing like arrangements: Service concession deals<o:p></o:p></span></b></a></p>
<span style="mso-bookmark: _Hlk140150193;"></span>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">The Spark
Living deal is best described as a Service Concession Arrangement. Under
accounting standards, it is not a borrowing as the Treasurer noted on a couple
of occasions. But to say as the Treasurer did :<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: 36.0pt;"><span style="font-size: 14.0pt; line-height: 107%;"><span style="mso-spacerun: yes;"> </span>“<i>Just as, for
example, the university took on a property that it didn't own and leased it on
a long-term lease, it would also be a recognised accounting liability rather
than borrowing”,<o:p></o:p></i></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">that a
service concession arrangement is analogous to an operating lease on a property
shows either a lack of understanding or is an attempt to trivialise the issue.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">Service
Concession Arrangements are covered by accounting standard AASB 1059. It covers
deals between a public entity (as grantor) and an operator. The operator
manages an existing asset of the grantor and/or constructs and develops a new
asset. The grantor controls the services that must be delivered and retains the
residual rights to the asset at the end of the arrangement. The control aspect is
an important concept as was noted above in the initial comments on who owns
UTAS’ assets.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">The operator
pays the grantor, usually a lump sum, to acquire the right to manage the asset
and in return receives payments over the term of the arrangement. In the case
of an existing asset owned by the grantor the value of the rights will be much
greater than where the asset is constructed by the operator. It may be a bit of
both, an existing asset which is further developed by the operator. For all
intents and purposes, a service concession arrangement is just another way of
borrowing to acquire an asset. The big attraction for governments and other
public entities was that it allowed borrowing like liabilities to be kept off their
balance sheets. The big attraction for operators was dealing with governments
which sound cash flows, the best credit rating in town and with tax exempt
status, which taken together gave financiers a heaven sent opportunity to
structure long term favourable deals. Before the advent of AASB 1059, which
whilst issued in 2017 didn’t take effect until 2020, service concession
arrangements were kept out of the public’s gaze. <span style="mso-spacerun: yes;"> </span>Since 2020 asset and liability amounts are
included in financial statements and some transparency has been restored.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">Toll roads
are the classic example of service concession assets. Melbourne City Link toll
road is operated by Transurban. The Victorian government managed to keep the
liability off its books until AASB 1059 became mandatory. Typically, the
grantor will include an asset (a service concession asset) and a liability (a
grant liability) on its books, whereas with a traditional borrowing arrangement
the asset will be the asset itself with a borrowing as a liability. It’s one
and the same. They’re both ways to finance a long-term asset.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">UTAS signed
a service concession arrangement with Spark Living in 2017 for Purpose Built
Student Accommodation (PBSA). At the time the PSBA was an existing asset of UTAS,
being various places of accommodations in Hobart Launceston and Burnie. <span style="mso-spacerun: yes;"> </span>To its credit UTAS was an early adopter of
AASB 1059 even though the standard didn’t apply until 2019, later postponed to
2020. UTAS granted a 30-year licence to operator Spark Living to receive net
rentals from these assets from 31 December 2017 in exchange for payment of an
upfront amount of $132.6 million.<span style="mso-spacerun: yes;"> </span>More accommodation
units were added to the portfolio and a further $70.8 million was received in
2021. The licensee/operator (Spark Living) is responsible for maintaining the
asset condition to a pre-set regime and UTAS retained the operations of the
premises. At the conclusion of the arrangement the asset will revert to UTAS’
control in a pre-agreed condition at which time UTAS will assume asset risk and
rental revenue.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">At the end
of the 2022 year the PSBA Service Concession liability in UTAS’ books was $174
million. This was the yet-to-be amortised portion of the upfront license fees
of $203.4 million.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">It is not
disclosed anywhere the net rentals received each year by Spark Living. These
amounts are, in effect, the ‘loan repayments’ to Spark Living, in consideration
for the $203.4 million ‘loan’. That reason alone suggests a greater need for an
oversight role from Treasury than for plain vanilla borrowings.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">UTAS is one
of three known universities to use the service concession asset arrangement for
student accommodation, the other two being the Australian National University
(ANU) and the University of Wollongong (UOW). Submission #3 by Professor James
Guthrie and his verbal evidence on 7<sup>th</sup> December 2022 both gave
mention of the disastrous consequences on UOW’s early termination of a service
concession arrangement but there were no follow up questions and hence the
significance of what happened may have escaped the Committee’s attention. A
cautionary tale about UOW’s foray into the world of finance is attached at the
end of this note.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">ANU is a big
user of service concession arrangements. At the end of the latest report year
ANU’s borrowings were $268 million and the service concession liability was
$519 million. By comparison UTAS has borrowings of $360 million and a service
concession liability of $174 million. In turnover terms ANU is twice the size
of UTAS.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">When asked by
Treasurer Ferguson to comment on whether a ratings agency considers total
liabilities when assessing a credit rating, a Treasury official replied:<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: 36.0pt;"><i><span style="font-size: 14.0pt; line-height: 107%;">“We do not have any level of visibility of that. I am
certainly not aware of how the rating agencies treated them when they did their
rating.” <o:p></o:p></span></i></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">Then the Treasurer
chimed in:<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left: 36.0pt;"><span style="font-size: 14.0pt; line-height: 107%;"><span style="mso-spacerun: yes;"> </span><i>“It really is
outside our wheelhouse.”<o:p></o:p></i></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">One was left
feeling the question was a set-up so the Treasurer could say it was none of his
business. But why? <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">It’s a
little hard to believe Treasury didn’t have <b><u>any</u></b> visibility as to
how ratings agencies assess credit ratings in light of Treasurer Gutwein’s
letter of the 29<sup>th </sup>Oct 2020 (see above) which mentions obtaining a
credit rating as well as querying the level of existing borrowings and other
debt like obligations. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">In addition,
Treasury and Tascorp officials had a meeting with Moody’s on 12<sup>th</sup>
May 2021 according to a Treasury briefing note obtained under RTI. The briefing
note was almost fully redacted so we can’t be sure what was on the agenda. They
could have discussed their footy tips for the weekend’s games I suppose. <o:p></o:p></span></p>
<p class="MsoNormal"><b><span style="font-size: 14.0pt; line-height: 107%;"><o:p> </o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-size: 14.0pt; line-height: 107%;">Borrowing
like arrangements: Other <o:p></o:p></span></b></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">The Spark
Living deal may fall outside the narrow definition of borrowings but when it
comes to accounting standards which govern accounts preparation, lease
liabilities are included. This is from the UTAS’ 2019 Annual Return.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;"><o:p> </o:p></span><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEibBQOK5xsJPNxPI4UQZonvGiC9hxi_iY4fCHkdGwx9A8AdNrBKghJ06mvuYHBo02yxqJuMu0wzoKQN2SxATV6Oaqvv1zNLbqMXQ6e53-bulgMVuxOlEiX4LyeUpSV1LwNOpm9EqXYPGFKU5GkvWqGYGZlISHe5BwjwUQlG7Ky15IYeUtuojEUcxQU7OuWM/s617/utas8.png" imageanchor="1" style="font-size: 18.6667px; margin-left: 1em; margin-right: 1em; text-align: center;"><img border="0" data-original-height="617" data-original-width="602" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEibBQOK5xsJPNxPI4UQZonvGiC9hxi_iY4fCHkdGwx9A8AdNrBKghJ06mvuYHBo02yxqJuMu0wzoKQN2SxATV6Oaqvv1zNLbqMXQ6e53-bulgMVuxOlEiX4LyeUpSV1LwNOpm9EqXYPGFKU5GkvWqGYGZlISHe5BwjwUQlG7Ky15IYeUtuojEUcxQU7OuWM/s16000/utas8.png" /></a></p>
<p class="MsoNormal"><span style="font-size: 14pt;">Total
borrowings at the end of 2009 were $209.6m. Lease liabilities are
included. These are finance leases as distinct from operating leases. </span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">What was the
sec7(2) limit back in 2019? Was it $200m? When the Committee gets to see all
the Sec 7(2) as requested hopefully we might all be a little wiser.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;"><span style="mso-spacerun: yes;"> </span>Accounting standards require finance lease
liabilities to be listed as borrowings. So, did UTAS have sec 7(2) approval for
the finance leases as well as the Tascorp facilities?<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">It may be
nitpicking, but what about the business card facility limit? Sure, it was
unused at year end but there was an approved limit in place, by financiers at
least.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">At the end
of 2022 UTAS had $406 million of approved borrowing facilities in place as per
Note 17.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%; mso-no-proof: yes;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgvfV5AHwdzHQNr8nc0dD4NaZh6u0RiSg4EVti5TrvSkBc6zPbrafrtxo-QhdZt6OnudC0YtZbATbSQrxdO-XVeLJeC1cwGltrhSytdUNQYDUwWm3TyzX0uS9f0OP-mOTiCv_dg0TIapD8ONo7VKmOQt2ECqQODYcZgDcho-6klVEJpi_ZBUuqXhxWlhGpn/s593/utas9.png" imageanchor="1" style="font-size: 18.6667px; margin-left: 1em; margin-right: 1em; text-align: center;"><img border="0" data-original-height="548" data-original-width="593" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgvfV5AHwdzHQNr8nc0dD4NaZh6u0RiSg4EVti5TrvSkBc6zPbrafrtxo-QhdZt6OnudC0YtZbATbSQrxdO-XVeLJeC1cwGltrhSytdUNQYDUwWm3TyzX0uS9f0OP-mOTiCv_dg0TIapD8ONo7VKmOQt2ECqQODYcZgDcho-6klVEJpi_ZBUuqXhxWlhGpn/s16000/utas9.png" /></a></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">Borrowings
due under lease arrangement were an extra $10 million at the end of the 2022
year (from Note 16).<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">Were all
approved pursuant to sec 7(2)? Note 16 in the 2022 Annual Report only refers to
a $400 million approved limit. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">The finance
leases currently are only small beer. But what’s to prevent UTAS from borrowing
say $100 million via finance leases. Just like it borrowed $203 million via a
grant to operate service concession assets. It’s certainly not beyond the wit
of financiers to easily circumvent the narrow sec 7(2) requirements that it
should only apply to certain borrowings, but not to other borrowing like
arrangements.<a href="file:///C:/Users/John%20&amp;%20Julie/Documents/articles/230717%20utas%20reflections.docx#_ftn1" name="_ftnref1" style="mso-footnote-id: ftn1;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: "Calibri",sans-serif; font-size: 14.0pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[1]</span></span><!--[endif]--></span></span></a><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">Even if sec
7(2) represents a mere oversight role it needs to be amended. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">If it is
meant to manage the economic and fiscal risks of the State as former Premier
Gutwein believed, then the case for an amendment is indisputable.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;"><o:p> </o:p></span></p>
<p class="MsoNormal"><a name="_Hlk140496264"><b><span style="font-size: 14.0pt; line-height: 107%;">The University of Wollongong (UOW) experience: A cautionary
tale<o:p></o:p></span></b></a></p>
<span style="mso-bookmark: _Hlk140496264;"></span>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">Late in
calendar year 2014 UOW signed a service concession deal. It received $120
million cash for a 39-year agreement with a partner for to establish a PPP, a
Public Private Partnership. A liability of $120 million was recorded in UOW’s
books as licence fees in advance.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">On 1<sup>st</sup>
Jan 2015, the liability was extinguished when $120 million of buildings were
transferred to the PPP, the operator of the service concession assets. The
assets had been on UOW’s books at a lesser amount, so the transfer meant UOW
booked a profit of $26 million on the transfer. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">At this
stage everyone was still smiling. The asset disappeared off UOW balance sheet.
There was no accounting standard that required either the value of the service
concession asset nor any liability to be included on UOW’s balance sheet. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">The PPP
agreement involved constructing and developing the asset - building more
accommodation for students.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">AASB 1059
meant UOW had to account for the assets and liability as from 1<sup>st</sup>
Jan 2019. The start date for AASB 1059 was then pushed back until 1<sup>st</sup>
Jan 2020 to be included in the 2020 annual return not due to see the light of
day until the middle of 2021. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">During 2021,
possibly after calculating UOW’s future liability, UOW decided to terminate the
service concession arrangement. At the end of 2021 the service concession
assets, the student accommodation facilities, were recorded as having a value
of $218 million in UOW’s books but the liability had a value of $274 million
which included future expected payments to the operator. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">In other words,
the liability was far greater than the asset value. The agreement was under
water. This occurred at a time when Covid severely affected student numbers. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">UOW decided
to exit the service concession arrangement but there were early termination
fees. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">Early in
2022 UOW forked out $274 million to discharge the liability and a further $169
million as an early termination fee, for a total of $443 million. The future
must have looked bleak if it made sense to pay such a huge penalty. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">UOW ended up
with an asset worth $218 million. That represents a loss of $225 million over
eight years <u>less</u> the initial license fee of $120 million <u>plus</u>
whatever other amounts UOW paid the operator as fees over the eight years of
the deal. All up, a loss somewhere between $150 million and $200 million. It
was a staggeringly bad deal.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;">These are
the sort of deals that require a sec 7(2) approval more so than straight
forward borrowing arrangements.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%;"><o:p> </o:p></span></p>
<div style="mso-element: footnote-list;"><!--[if !supportFootnotes]--><br clear="all" />
<hr align="left" size="1" width="33%" />
<!--[endif]-->
<div id="ftn1" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="file:///C:/Users/John%20&amp;%20Julie/Documents/articles/230717%20utas%20reflections.docx#_ftnref1" name="_ftn1" style="mso-footnote-id: ftn1;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: "Calibri",sans-serif; font-size: 10.0pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[1]</span></span><!--[endif]--></span></span></a>
The data dump by UTAS in the W/E 14<sup>th</sup> July 2023 include minutes of
the University Council meeting on 5<sup>th</sup> April <span style="mso-spacerun: yes;"> </span>2019 which gave the formal go ahead for the Hobart
CDB move. The minutes mention a sale lease back arrangement of UTAS ‘s major Hobart
CDB building, the $400 million STEM building. A sale leaseback arrangement is
usually classed as a borrowing like arrangement.<o:p></o:p></p>
</div>
</div>tasfintalkhttp://www.blogger.com/profile/04012719835733649162noreply@blogger.com0tag:blogger.com,1999:blog-4314112685994399920.post-47229509890302247042023-07-08T08:18:00.002+10:002023-07-11T12:22:25.350+10:00UTAS : The road ahead<p> </p><p style="margin-bottom: 11.25pt; margin-left: 0cm; margin-right: 0cm; margin-top: 11.25pt;"><span style="color: black; font-family: "bodyFont",serif; font-size: 14.5pt;">The
financial overview in UTAS’s recently released annual report for the calendar
year 2022, although much more extensive than in past years, did little to
explain UTAS’s current financial position.<o:p></o:p></span></p>
<p style="-webkit-text-stroke-width: 0px; font-variant-caps: normal; font-variant-ligatures: normal; margin-bottom: 11.25pt; margin-left: 0cm; margin-right: 0cm; margin-top: 11.25pt; orphans: 2; text-align: start; text-decoration-color: initial; text-decoration-style: initial; text-decoration-thickness: initial; widows: 2; word-spacing: 0px;"><span style="color: black; font-family: "bodyFont",serif; font-size: 14.5pt;">Detailing
what went up and what went down is a mind-numbing exercise, which does little
to explain the financial challenges or “how we will approach the years ahead as
we enter ever more variations of the new normal”, as UTAS noted in its report.<o:p></o:p></span></p>
<p style="-webkit-text-stroke-width: 0px; font-variant-caps: normal; font-variant-ligatures: normal; margin-bottom: 11.25pt; margin-left: 0cm; margin-right: 0cm; margin-top: 11.25pt; orphans: 2; text-align: start; text-decoration-color: initial; text-decoration-style: initial; text-decoration-thickness: initial; widows: 2; word-spacing: 0px;"><span style="color: black; font-family: "bodyFont",serif; font-size: 14.5pt;">At
a guess that’s “PR speak’’ for “We’re not sure where we’re going, but we’ll
give it a go.”<o:p></o:p></span></p>
<p style="-webkit-text-stroke-width: 0px; font-variant-caps: normal; font-variant-ligatures: normal; margin-bottom: 11.25pt; margin-left: 0cm; margin-right: 0cm; margin-top: 11.25pt; orphans: 2; text-align: start; text-decoration-color: initial; text-decoration-style: initial; text-decoration-thickness: initial; widows: 2; word-spacing: 0px;"><span style="color: black; font-family: "bodyFont",serif; font-size: 14.5pt;">Blessed
with gifted land, funded by capital grants for buildings and endowed with
bequests and other amounts for education and research purposes, UTAS has
gradually built its net assets position.<o:p></o:p></span></p>
<p style="-webkit-text-stroke-width: 0px; font-variant-caps: normal; font-variant-ligatures: normal; margin-bottom: 11.25pt; margin-left: 0cm; margin-right: 0cm; margin-top: 11.25pt; orphans: 2; text-align: start; text-decoration-color: initial; text-decoration-style: initial; text-decoration-thickness: initial; widows: 2; word-spacing: 0px;"><span style="color: black; font-family: "bodyFont",serif; font-size: 14.5pt;">Apart
from capital grants and investment income, UTAS makes losses every year, losses
from the core activities of teaching and research, and losses caused by a
relentless pattern of what is described as restructuring costs. We aren’t told
what these are, whether they’re consultants’ fees, or whether they relate to
the Hobart relocation. All we know is, at $55m over the past eight years,
they’re much greater than the deficits from teaching and research.<span></span></span></p><a name='more'></a><o:p></o:p><p></p>
<p style="-webkit-text-stroke-width: 0px; font-variant-caps: normal; font-variant-ligatures: normal; margin-bottom: 11.25pt; margin-left: 0cm; margin-right: 0cm; margin-top: 11.25pt; orphans: 2; text-align: start; text-decoration-color: initial; text-decoration-style: initial; text-decoration-thickness: initial; widows: 2; word-spacing: 0px;"><span style="color: black; font-family: "bodyFont",serif; font-size: 14.5pt;">Paradoxically,
investment income will fall as investments are redeemed to fund the Hobart CDB
move. If, as UTAS has suggested, the prize at the end of the day is only $200m
once the Sandy Bay assets are monetised (as consultants term it) and the
development costs in the Hobart CDB paid for, how will UTAS fund deficits from
core activities?<o:p></o:p></span></p>
<p style="-webkit-text-stroke-width: 0px; font-variant-caps: normal; font-variant-ligatures: normal; margin-bottom: 11.25pt; margin-left: 0cm; margin-right: 0cm; margin-top: 11.25pt; orphans: 2; text-align: start; text-decoration-color: initial; text-decoration-style: initial; text-decoration-thickness: initial; widows: 2; word-spacing: 0px;"><span style="color: black; font-family: "bodyFont",serif; font-size: 14.5pt;">Over
the past eight years UTAS’s liabilities have grown by 350 per cent, almost
twice as fast as its assets, despite more than $300m million in capital grants
and revaluations of its land, buildings and investment assets.<o:p></o:p></span></p>
<p style="-webkit-text-stroke-width: 0px; font-variant-caps: normal; font-variant-ligatures: normal; margin-bottom: 11.25pt; margin-left: 0cm; margin-right: 0cm; margin-top: 11.25pt; orphans: 2; text-align: start; text-decoration-color: initial; text-decoration-style: initial; text-decoration-thickness: initial; widows: 2; word-spacing: 0px;"><span style="color: black; font-family: "bodyFont",serif; font-size: 14.5pt;">As
more cash is needed to service liabilities, less cash is available for other
needs.<o:p></o:p></span></p>
<p style="-webkit-text-stroke-width: 0px; font-variant-caps: normal; font-variant-ligatures: normal; margin-bottom: 11.25pt; margin-left: 0cm; margin-right: 0cm; margin-top: 11.25pt; orphans: 2; text-align: start; text-decoration-color: initial; text-decoration-style: initial; text-decoration-thickness: initial; widows: 2; word-spacing: 0px;"><span style="color: black; font-family: "bodyFont",serif; font-size: 14.5pt;">Historically
UTAS has had a low level of liabilities. Required borrowings were from the
Tasmanian Public Finance Corporation (Tascorp), the government’s finance arm.
UTAS’s Governing Act requires the treasurer to approve borrowings.<o:p></o:p></span></p>
<p style="-webkit-text-stroke-width: 0px; font-variant-caps: normal; font-variant-ligatures: normal; margin-bottom: 11.25pt; margin-left: 0cm; margin-right: 0cm; margin-top: 11.25pt; orphans: 2; text-align: start; text-decoration-color: initial; text-decoration-style: initial; text-decoration-thickness: initial; widows: 2; word-spacing: 0px;"><span style="color: black; font-family: "bodyFont",serif; font-size: 14.5pt;">To
assemble more funds for the Hobart expansion, UTAS sold future rental rights of
some of the purpose-built student accommodation to Spark Living for $203m. It
retained the buildings, but handed over the rights to receive the rents for 30
years in exchange for a lump sum.<o:p></o:p></span></p>
<p style="-webkit-text-stroke-width: 0px; font-variant-caps: normal; font-variant-ligatures: normal; margin-bottom: 11.25pt; margin-left: 0cm; margin-right: 0cm; margin-top: 11.25pt; orphans: 2; text-align: start; text-decoration-color: initial; text-decoration-style: initial; text-decoration-thickness: initial; widows: 2; word-spacing: 0px;"><span style="color: black; font-family: "bodyFont",serif; font-size: 14.5pt;">It
was on track to raise more money by this method, but Covid intervened and
student numbers plummeted. It had to revert to the more traditional form of
finance – borrowings.<o:p></o:p></span></p>
<p style="-webkit-text-stroke-width: 0px; font-variant-caps: normal; font-variant-ligatures: normal; margin-bottom: 11.25pt; margin-left: 0cm; margin-right: 0cm; margin-top: 11.25pt; orphans: 2; text-align: start; text-decoration-color: initial; text-decoration-style: initial; text-decoration-thickness: initial; widows: 2; word-spacing: 0px;"><span style="color: black; font-family: "bodyFont",serif; font-size: 14.5pt;">However,
Tascorp’s pesky demands, wanting more details of business plans and possibly
more security for any loans, was an unfamiliar intrusion for UTAS.<o:p></o:p></span></p>
<p style="-webkit-text-stroke-width: 0px; font-variant-caps: normal; font-variant-ligatures: normal; margin-bottom: 11.25pt; margin-left: 0cm; margin-right: 0cm; margin-top: 11.25pt; orphans: 2; text-align: start; text-decoration-color: initial; text-decoration-style: initial; text-decoration-thickness: initial; widows: 2; word-spacing: 0px;"><span style="color: black; font-family: "bodyFont",serif; font-size: 14.5pt;">Instead,
it bought a credit rating from Moody’s, coincidentally the same as for the
state of Tasmania, and raised $350m in 2022 by issuing bonds to large
investors. It paid off Tascorp’s loans and put the balance in its war chest.<o:p></o:p></span></p>
<p style="-webkit-text-stroke-width: 0px; font-variant-caps: normal; font-variant-ligatures: normal; margin-bottom: 11.25pt; margin-left: 0cm; margin-right: 0cm; margin-top: 11.25pt; orphans: 2; text-align: start; text-decoration-color: initial; text-decoration-style: initial; text-decoration-thickness: initial; widows: 2; word-spacing: 0px;"><span style="color: black; font-family: "bodyFont",serif; font-size: 14.5pt;">At
one stage it looked like UTAS might have enough to pay for the Hobart CDB move,
which it said would cost $600m. Yet with building works barely under way, the
Mercury has reported (on January 20) that there have already been significant
cost blowouts.<o:p></o:p></span></p>
<p style="-webkit-text-stroke-width: 0px; font-variant-caps: normal; font-variant-ligatures: normal; margin-bottom: 11.25pt; margin-left: 0cm; margin-right: 0cm; margin-top: 11.25pt; orphans: 2; text-align: start; text-decoration-color: initial; text-decoration-style: initial; text-decoration-thickness: initial; widows: 2; word-spacing: 0px;"><span style="color: black; font-family: "bodyFont",serif; font-size: 14.5pt;">The
2022 financials also revealed a blowout in payables, wage underpayments of $14m
still owing, and capital commitments of $130m in the pipeline. That will see
most of the existing cash disappear.<o:p></o:p></span></p>
<p style="-webkit-text-stroke-width: 0px; font-variant-caps: normal; font-variant-ligatures: normal; margin-bottom: 11.25pt; margin-left: 0cm; margin-right: 0cm; margin-top: 11.25pt; orphans: 2; text-align: start; text-decoration-color: initial; text-decoration-style: initial; text-decoration-thickness: initial; widows: 2; word-spacing: 0px;"><span style="color: black; font-family: "bodyFont",serif; font-size: 14.5pt;">If
UTAS is to continue its mission to rearrange Hobart, there’s only about $300m
of its investment portfolio available to keep the dream alive. UTAS needs to
hold at least $200m in restricted assets either because it’s a strict
requirement (for trust funds) or because prudent management leaves no
alternative (say for short-term contract liabilities).<o:p></o:p></span></p>
<p style="-webkit-text-stroke-width: 0px; font-variant-caps: normal; font-variant-ligatures: normal; margin-bottom: 11.25pt; margin-left: 0cm; margin-right: 0cm; margin-top: 11.25pt; orphans: 2; text-align: start; text-decoration-color: initial; text-decoration-style: initial; text-decoration-thickness: initial; widows: 2; word-spacing: 0px;"><span style="color: black; font-family: "bodyFont",serif; font-size: 14.5pt;">Any
extra borrowings will require the treasurer’s approval, and will require
security, particularly if Tascorp obliges. This will put bondholders in a
riskier position as they get shuffled down the queue. The value of their
investment will fall. They won’t be happy. They were led to believe their
investments would be sufficient.<o:p></o:p></span></p>
<p style="-webkit-text-stroke-width: 0px; font-variant-caps: normal; font-variant-ligatures: normal; margin-bottom: 11.25pt; margin-left: 0cm; margin-right: 0cm; margin-top: 11.25pt; orphans: 2; text-align: start; text-decoration-color: initial; text-decoration-style: initial; text-decoration-thickness: initial; widows: 2; word-spacing: 0px;"><span style="color: black; font-family: "bodyFont",serif; font-size: 14.5pt;">At
one stage, Premier Jeremy Rockliff claimed UTAS was a private company. A
Freudian slip maybe, but it does suggest a concerning lack of understanding of
UTAS’s legal status and the government’s role.<o:p></o:p></span></p>
<p style="-webkit-text-stroke-width: 0px; font-variant-caps: normal; font-variant-ligatures: normal; margin-bottom: 11.25pt; margin-left: 0cm; margin-right: 0cm; margin-top: 11.25pt; orphans: 2; text-align: start; text-decoration-color: initial; text-decoration-style: initial; text-decoration-thickness: initial; widows: 2; word-spacing: 0px;"><span style="color: black; font-family: "bodyFont",serif; font-size: 14.5pt;">Vice-Chancellor
Rufus Black told the current Legislative Council inquiry UTAS is ultimately a
state entity, implying the state government will come to the rescue if needed.<o:p></o:p></span></p>
<p style="-webkit-text-stroke-width: 0px; font-variant-caps: normal; font-variant-ligatures: normal; margin-bottom: 11.25pt; margin-left: 0cm; margin-right: 0cm; margin-top: 11.25pt; orphans: 2; text-align: start; text-decoration-color: initial; text-decoration-style: initial; text-decoration-thickness: initial; widows: 2; word-spacing: 0px;"><span style="color: black; font-family: "bodyFont",serif; font-size: 14.5pt;">If
that’s the case UTAS’s Governing Act needs changing.<o:p></o:p></span></p>
<p style="-webkit-text-stroke-width: 0px; font-variant-caps: normal; font-variant-ligatures: normal; margin-bottom: 11.25pt; margin-left: 0cm; margin-right: 0cm; margin-top: 11.25pt; orphans: 2; text-align: start; text-decoration-color: initial; text-decoration-style: initial; text-decoration-thickness: initial; widows: 2; word-spacing: 0px;"><span style="color: black; font-family: "bodyFont",serif; font-size: 14.5pt;">Will
the state bail out UTAS so it can move to the Hobart CDB, which many Hobartians
do not want? As well as build a stadium? And subsidise an AFL side at greater
cost than it would take to help UTAS remain in Sandy Bay?<o:p></o:p></span></p>
<p style="-webkit-text-stroke-width: 0px; font-variant-caps: normal; font-variant-ligatures: normal; margin-bottom: 11.25pt; margin-left: 0cm; margin-right: 0cm; margin-top: 11.25pt; orphans: 2; text-align: start; text-decoration-color: initial; text-decoration-style: initial; text-decoration-thickness: initial; widows: 2; word-spacing: 0px;"><span style="color: black; font-family: "bodyFont",serif; font-size: 14.5pt;">UTAS’s
2022 financial statements have certainly brought into sharp focus the problems
ahead.<o:p></o:p></span></p><p style="-webkit-text-stroke-width: 0px; font-variant-caps: normal; font-variant-ligatures: normal; margin-bottom: 11.25pt; margin-left: 0cm; margin-right: 0cm; margin-top: 11.25pt; orphans: 2; text-align: start; text-decoration-color: initial; text-decoration-style: initial; text-decoration-thickness: initial; widows: 2; word-spacing: 0px;"><span style="color: black; font-family: "bodyFont",serif; font-size: 14.5pt;"><i>Published in The Mercury on 8th July 2023 as </i></span><span style="font-family: headFont; font-weight: 700;">IT MAKES A LOT OF CENTS TO HAVE A CLEARER OVERVIEW OF UNIVERSITY’S FINANCIAL POSITION</span></p>tasfintalkhttp://www.blogger.com/profile/04012719835733649162noreply@blogger.com0tag:blogger.com,1999:blog-4314112685994399920.post-11490746650549428942023-06-28T19:27:00.005+10:002023-07-11T12:23:21.355+10:00UTAS' 2022 Financials: Is UTAS still on track?<p> (<i>This is a note prepared for the Legislative Council's Inquiry into the Provisions of the University of Tasmania Act 1992)</i></p><p class="MsoNormal"><b><span style="font-size: 20pt; line-height: 107%;">Introduction<o:p></o:p></span></b></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">The recent
tabling of UTAS’ 2022 Annual Report is an opportune time to have a close look at
UTAS’ current situation. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">Rather than
just a snapshot of one year’s financials, a few past years will provide a
better basis to form a view of how UTAS has arrived at where it is now, and
what this means for the future.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">The
following note is based on UTAS’ financial statements since 2015. It is not a
management accounting exercise looking at costs, revenues and student numbers
etc, for that is outside the Committee’s Terms of Reference, rather an
explanation of UTAS’ overall financial situation. <o:p></o:p></span></p>
<p class="MsoNormal"><a name="_Hlk138769585"><b><span style="font-size: 20pt; line-height: 107%;">Executive summary<o:p></o:p></span></b></a></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;">UTAS’ net profits are very volatile. <o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;">Stripping away capital grants and
investment income however leaves a more sedate picture.<o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;">Unfortunately, all that’s left are
losses, losses from the core activities of teaching and research, and losses
caused by a relentless pattern of what UTAS describes as restructuring costs. <span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;">It’s not so much that UTAS’s buildings
may no longer be suitable, but its current financial model is not fit for
purpose. <o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;">The gobsmacking reality which UTAS
has kept hidden, is that deficits from core activities have been funded by
investment income, which inevitably will fall as investments are redeemed to
fund the Hobart CDB move.<o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;">If as UTAS has suggested, the prize
at the end of the day is only $200 million once the Sandy Bay assets are
monetised (as consultants term it) and the development costs in the Hobart CDB
paid for, how will deficits from UTAS’ core activities be funded?<span></span></span></span></p><a name='more'></a><o:p></o:p><p></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;">Over the past eight years the value
of UTAS’ equity (its net assets) has grown by a modest 150 per cent despite receiving
$301 million in capital grants, spending over $1 billion on property plant and
equipment assets and booking a $167 million revaluation of its properties in
the 2022 year.<o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;">Yet its liabilities have grown by 350
per cent over the same period.<o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;">UTAS still has plenty of assets, but
the increased liabilities need servicing. <o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;">As more cash is used to service
liabilities, net operating cash comes under pressure resulting in less cash
available for other needs. <o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;">If the Hobart move proceeds, it will
be a voyage into the unknown. Are there sufficient cash buffers for such a
venture? It’s doubtful on the evidence to date.<o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;">One inescapable conclusion is that
UTAS’ recent $350 million Green Bond issue, which was thought by many at the
time to be sufficient to fund its move into the Hobart CDB until surplus assets
at Sandy Bay start producing revenue,</span></span><a href="file:///C:/Users/John%20&amp;%20Julie/Documents/JWL/UTAS%208%20year%20overview%20V2.docx#_ftn1" name="_ftnref1" style="mso-footnote-id: ftn1;" title=""><span style="mso-bookmark: _Hlk138769585;"><span class="MsoFootnoteReference"><span style="font-size: 14pt; line-height: 107%;"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[1]</span></span><!--[endif]--></span></span></span></span></a><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;"> won’t be nearly enough for that purpose.<o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;">Even if UTAS bows to community
pressure and either re-thinks or abandons its Hobart CDB move, more borrowings
are likely as existing cash and readily redeemable investments won’t last long
given the commitments disclosed in the 2022 financial statements.<o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;">Any borrowings will require the
Treasurer’s approval. This is where UTAS’ problems become a matter for all Tasmanians.<o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;">Any borrowings will require security,
particularly if Tascorp, the government’s finance arm, obliges. Any additional
secured loan puts the $350 million Green Bond holders in a riskier position.
The latter felt safe because they were led to believe their investments would
be enough to fund UTAS’ expansion plans. As an investment become riskier, its
value falls. If UTAS suffers a consequent credit ratings downgrade and Green
Bond investors see a further decline in the value of their investments, Tasmanians
will feel the backwash. <o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;">UTAS and the State government are
inextricably linked. To what extent is not quite clear. Vice Chancellor Rufus
Black believes UTAS is ultimately a state entity, implying that the State
government will come to the rescue if needed. Is this the legal or the
pragmatic reality? Large organisation such as UTAS are well versed in the
Doctrine of Moral Hazard. Hence it could well be the latter.<o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;">Or maybe the Australian government
will step in if UTAS suffers liquidity problems? Moody’s reassured potential
Green Bond investors this would likely occur. Is the Australian government
aware of these implicit guarantees?<o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;">The State’s role and responsibilities
is something this Committee needs to resolve and make any necessary recommendations
if needed.<o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;">There are serious problems and/or
misunderstandings of government(s) and their relationships with UTAS that need
to be cleared up. Sooner rather than later would be the best option. <o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;">The 2022 financial statements have
brought into sharp relief the problems ahead.<o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><i><span style="font-size: 14pt; line-height: 107%;">(A summary of the data extracted from
UTAS’ Annual Reports used to prepare this note is attached at the end).<o:p></o:p></span></i></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><b><span style="font-size: 20pt; line-height: 107%;">Net profits: Core and other
activities<o:p></o:p></span></b></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;">Over the past eight years the pattern
of net profits is as follows:<o:p></o:p></span></span></p>
<p class="MsoNormal"></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgdguwhNvpos8CNA1eugd61PfZ8SuZk1OykkpR8hfu5TSGbX5tWy2cVE00Dz_vfSJGQ4J_EBAHIGq-kbGOz6Fggo5DN0WazmLwPq_9-tF7w4JWbRa1dHxp2CKFx4Jm6ygVHBXmIPAnBx40rB_enil5hcjyWNnx3NB6FXxu_8NZmZp8RTpQoI7VBADeE7mfb/s480/utas1.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="309" data-original-width="480" height="413" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgdguwhNvpos8CNA1eugd61PfZ8SuZk1OykkpR8hfu5TSGbX5tWy2cVE00Dz_vfSJGQ4J_EBAHIGq-kbGOz6Fggo5DN0WazmLwPq_9-tF7w4JWbRa1dHxp2CKFx4Jm6ygVHBXmIPAnBx40rB_enil5hcjyWNnx3NB6FXxu_8NZmZp8RTpQoI7VBADeE7mfb/w640-h413/utas1.png" width="640" /></a></div><br /><p></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;">The 2020 year saw unrealised
investment losses which severely impacted investment returns. The 2021 saw a
bounce back in markets with significant unrealised investment gains. The 2022
years saw more unrealised losses of $35.5 million which reduced net profits. <o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;">The financial overview in UTAS’ 2022
Annual Report makes it clear that the profit from core activities of teaching
and research “<i>is the financial metric that management of the University
focuses most of its attention on</i>.”</span></span><a href="file:///C:/Users/John%20&amp;%20Julie/Documents/JWL/UTAS%208%20year%20overview%20V2.docx#_ftn2" name="_ftnref2" style="mso-footnote-id: ftn2;" title=""><span style="mso-bookmark: _Hlk138769585;"><span class="MsoFootnoteReference"><span style="font-size: 14pt; line-height: 107%;"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[2]</span></span><!--[endif]--></span></span></span></span></a><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;"> This metric always appears in Annual Reports but 2022 was the first
year, in a while at least, it received an explanation. A partial explanation is
probably a better description. Readers didn’t get a clear understanding of what
constitutes net profits. <o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;">A bit of history might assist. The
following graph show the contribution from core and other activities over the eight-year
period since 2015:<o:p></o:p></span></span></p>
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhQ6og_4WOFl12MEAbzl5z-KILLKVxEF2_BLwtWjYTc5UCbX1GPSOikvIgqqdVyCLMSB7P8yg6IfiEVFxtXiV9esC0KLNlWfyLnDvITqT5AZJl-3_oXtzZkxZdUFGiZiKeJQzSaBe43QE-TQgIpvwLgiHXCzsp3pT5tQfwa87Zx7tSHyS_TE8oK7RLhLbqq/s480/utas2.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="269" data-original-width="480" height="358" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhQ6og_4WOFl12MEAbzl5z-KILLKVxEF2_BLwtWjYTc5UCbX1GPSOikvIgqqdVyCLMSB7P8yg6IfiEVFxtXiV9esC0KLNlWfyLnDvITqT5AZJl-3_oXtzZkxZdUFGiZiKeJQzSaBe43QE-TQgIpvwLgiHXCzsp3pT5tQfwa87Zx7tSHyS_TE8oK7RLhLbqq/w640-h358/utas2.png" width="640" /></a></div><br /><p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">Over the past eight years core
activities have contributed mostly losses. In 2022 the loss was $18.9 million</span><a href="file:///C:/Users/John%20&amp;%20Julie/Documents/JWL/UTAS%208%20year%20overview%20V2.docx#_ftn3" name="_ftnref3" title=""><span class="MsoFootnoteReference"><span style="font-size: 14pt; line-height: 107%;"><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[3]</span></span></span></span></a><span style="font-size: 14pt; line-height: 107%;">, the biggest loss in the last 8 years. Only twice have core activities
produced profits, in 2017 and 2020. Can
we really believe that UTAS’ major financial focus is on profits from core
activities? Or on other activities? Has past performance been satisfactory and
if not, what has been done to rectify matters to meet the yet undisclosed
profit targets for core activities. Is the Hobart CDB designed to address this
problem? It has never been mentioned as
a rationale for the move.</span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;">The overwhelmingly contributions to
UTAS’ net profits come from other sources. The following graph shows the
breakup of these amounts. Capital grants and investment income comprise the
bulk.<o:p></o:p></span></span></p>
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhUvfZ0PoQoUebiAeQ73ZMrvwRbGdDVUipYaQ-filnn-DFo6L1spXnVoZBjYH8OFPAM3onHFGyQzuKT_0bJu4lmtOu-r4pmvRKSdkjtrflZyRA859eCuamLKTlw1x223vrgHs_9KySm9qQUNhAKH5CF-SciDbNleRZX7Wo858Fqt5iL2HNCh2ZJBfaIyT8W/s480/utas3.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="289" data-original-width="480" height="386" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhUvfZ0PoQoUebiAeQ73ZMrvwRbGdDVUipYaQ-filnn-DFo6L1spXnVoZBjYH8OFPAM3onHFGyQzuKT_0bJu4lmtOu-r4pmvRKSdkjtrflZyRA859eCuamLKTlw1x223vrgHs_9KySm9qQUNhAKH5CF-SciDbNleRZX7Wo858Fqt5iL2HNCh2ZJBfaIyT8W/w640-h386/utas3.png" width="640" /></a></div><br /><p class="MsoNormal"><br /></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;"><span style="mso-spacerun: yes;"> </span>Just a few comments:<o:p></o:p></span></span></p>
<p class="MsoListParagraphCxSpFirst" style="mso-list: l2 level1 lfo3; text-indent: -18pt;"><span style="mso-bookmark: _Hlk138769585;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 107%;">Capital
grants: Accounting conventions allow these to be included in net profit, but
arguably publicly funded grants to fund publicly owned entities to fund
buildings are more akin to equity contributions from public owners. The grants
are from both Federal and State government for specific building projects.<o:p></o:p></span></span></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l2 level1 lfo3; text-indent: -18pt;"><span style="mso-bookmark: _Hlk138769585;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 107%;">Net
investment income is self-explanatory. Interest paid has been netted off
against interest and dividends received, realised and unrealised gains from share
sales. Losses in any year are attributable to unrealised losses when adverse
market movements were experienced.<o:p></o:p></span></span></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l2 level1 lfo3; text-indent: -18pt;"><span style="mso-bookmark: _Hlk138769585;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 107%;">Statutory
funds are quasi equity amounts like trust funds and endowments for scholarship
purposes etc and other specific grants etc that cannot be used to fund general
expenditure. <o:p></o:p></span></span></p>
<p class="MsoListParagraphCxSpLast" style="mso-list: l2 level1 lfo3; text-indent: -18pt;"><span style="mso-bookmark: _Hlk138769585;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 107%;">Other
are mainly restructuring costs. Restructuring costs are a such a constant
feature of UTAS’ business, a total of $54.7 million at an average of $6.8 pa
since 2015, it is hard to imagine why they’re not part of core activities. Are
they consultants’ costs? The costs of the Hobart transition? It is not clear
whether these have been capitalised or expensed when incurred?<o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;">Bar charts can be difficult to
comprehend at times. Sometimes a table will be better. The following table
lists the components of net profits in 2022 compared to the average over the
past eight years.<o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;">It’s a tell-tale story of UTAS’
operating model.<o:p></o:p></span></span></p>
<span style="mso-bookmark: _Hlk138769585;"></span><span style="mso-bookmark: _Hlk138769585;"></span><span style="mso-bookmark: _Hlk138769585;"></span><span style="mso-bookmark: _Hlk138769585;"></span><span style="mso-bookmark: _Hlk138769585;"></span><span style="mso-bookmark: _Hlk138769585;"></span><span style="mso-bookmark: _Hlk138769585;"></span><span style="mso-bookmark: _Hlk138769585;"></span><span style="mso-bookmark: _Hlk138769585;"></span><span style="mso-bookmark: _Hlk138769585;"></span><span style="mso-bookmark: _Hlk138769585;"></span><span style="mso-bookmark: _Hlk138769585;"></span><span style="mso-bookmark: _Hlk138769585;"></span><span style="mso-bookmark: _Hlk138769585;"></span><span style="mso-bookmark: _Hlk138769585;"></span><span style="mso-bookmark: _Hlk138769585;"></span><span style="mso-bookmark: _Hlk138769585;"></span><span style="mso-bookmark: _Hlk138769585;"></span><span style="mso-bookmark: _Hlk138769585;"></span><span style="mso-bookmark: _Hlk138769585;"></span><span style="mso-bookmark: _Hlk138769585;"></span><span style="mso-bookmark: _Hlk138769585;"></span><span style="mso-bookmark: _Hlk138769585;"></span><span style="mso-bookmark: _Hlk138769585;"></span><span style="mso-bookmark: _Hlk138769585;"></span><span style="mso-bookmark: _Hlk138769585;"></span><span style="mso-bookmark: _Hlk138769585;"></span><span style="mso-bookmark: _Hlk138769585;"></span><table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; mso-padding-alt: 0cm 5.4pt 0cm 5.4pt; mso-yfti-tbllook: 1184; width: 392px;">
<tbody><tr style="height: 15pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
<td colspan="3" nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 294pt;" valign="bottom" width="392">
<p align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: center;"><span style="mso-bookmark: _Hlk138769585;"><b><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">UTAS NET PROFITS $M<o:p></o:p></span></b></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 1;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 190.65pt;" valign="bottom" width="254"><span style="mso-bookmark: _Hlk138769585;"></span></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 39.05pt;" valign="bottom" width="52">
<p align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: center;"><span style="mso-bookmark: _Hlk138769585;"><b><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2022<o:p></o:p></span></b></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 64.3pt;" valign="bottom" width="86">
<p align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: center;"><span style="mso-bookmark: _Hlk138769585;"><b><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Average<o:p></o:p></span></b></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 2;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 190.65pt;" valign="bottom" width="254">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="mso-bookmark: _Hlk138769585;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Net change stat funds<o:p></o:p></span></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 39.05pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="mso-bookmark: _Hlk138769585;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">4.9<o:p></o:p></span></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 64.3pt;" valign="bottom" width="86">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="mso-bookmark: _Hlk138769585;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">8.2<o:p></o:p></span></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 3;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 190.65pt;" valign="bottom" width="254">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="mso-bookmark: _Hlk138769585;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Capital grants<o:p></o:p></span></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 39.05pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="mso-bookmark: _Hlk138769585;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">97.5<o:p></o:p></span></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 64.3pt;" valign="bottom" width="86">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="mso-bookmark: _Hlk138769585;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">33.1<o:p></o:p></span></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 4;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 190.65pt;" valign="bottom" width="254">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="mso-bookmark: _Hlk138769585;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Net invest income<o:p></o:p></span></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 39.05pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="mso-bookmark: _Hlk138769585;"><span style="color: red; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">37.6</span></span><span style="mso-bookmark: _Hlk138769585;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 64.3pt;" valign="bottom" width="86">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="mso-bookmark: _Hlk138769585;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">26.8<o:p></o:p></span></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 5;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 190.65pt;" valign="bottom" width="254">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="mso-bookmark: _Hlk138769585;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Core activities <o:p></o:p></span></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 39.05pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="mso-bookmark: _Hlk138769585;"><span style="color: red; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">18.9</span></span><span style="mso-bookmark: _Hlk138769585;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 64.3pt;" valign="bottom" width="86">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="mso-bookmark: _Hlk138769585;"><span style="color: red; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">4.0</span></span><span style="mso-bookmark: _Hlk138769585;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 6;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 190.65pt;" valign="bottom" width="254">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="mso-bookmark: _Hlk138769585;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Restructuring costs<o:p></o:p></span></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 39.05pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="mso-bookmark: _Hlk138769585;"><span style="color: red; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2.8</span></span><span style="mso-bookmark: _Hlk138769585;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 64.3pt;" valign="bottom" width="86">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="mso-bookmark: _Hlk138769585;"><span style="color: red; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">6.8</span></span><span style="mso-bookmark: _Hlk138769585;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 7;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 190.65pt;" valign="bottom" width="254">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="mso-bookmark: _Hlk138769585;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Other<o:p></o:p></span></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 39.05pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="mso-bookmark: _Hlk138769585;"><span style="color: red; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">0.0</span></span><span style="mso-bookmark: _Hlk138769585;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 64.3pt;" valign="bottom" width="86">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="mso-bookmark: _Hlk138769585;"><span style="color: red; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">1.9</span></span><span style="mso-bookmark: _Hlk138769585;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 8;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 190.65pt;" valign="bottom" width="254"><span style="mso-bookmark: _Hlk138769585;"></span></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 39.05pt;" valign="bottom" width="52"><span style="mso-bookmark: _Hlk138769585;"></span></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 64.3pt;" valign="bottom" width="86"><span style="mso-bookmark: _Hlk138769585;"></span></td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 9; mso-yfti-lastrow: yes;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 190.65pt;" valign="bottom" width="254">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="mso-bookmark: _Hlk138769585;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Total<o:p></o:p></span></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 39.05pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="mso-bookmark: _Hlk138769585;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">43.1<o:p></o:p></span></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 64.3pt;" valign="bottom" width="86">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="mso-bookmark: _Hlk138769585;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">55.4<o:p></o:p></span></span></p>
</td>
</tr>
</tbody></table>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;"><o:p> </o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;">Neither statutory funds nor capital
grants fund general purpose operating expenses. Core activities produce losses
which must be funded from investment earnings. As do restructuring costs. <span style="mso-spacerun: yes;"> </span>That’s the major conclusion from looking at
profits over the past eight years.<o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;">It is quite staggering to see the
relentless pattern of restructuring costs. No explanations are given.<o:p></o:p></span></span></p>
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJyxQr7VYp7ekVIsS3y8GkeSjGo1rfZCG9vwkVyk_uVbcFDA42tdE3qRSfO-Qn-b5J6KsXZF6zUx1D4LOYkzjUTzf12wZz0xUgd9gumpv_SeUrpodlbVlqGC1dsO9-Ryrn0NyQ2wJhO5hMWn4oi0tHe5tr81DDr6fNSsnHjrvLrNCUbxFadHsknR3WdFMR/s480/utas4.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="289" data-original-width="480" height="386" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJyxQr7VYp7ekVIsS3y8GkeSjGo1rfZCG9vwkVyk_uVbcFDA42tdE3qRSfO-Qn-b5J6KsXZF6zUx1D4LOYkzjUTzf12wZz0xUgd9gumpv_SeUrpodlbVlqGC1dsO9-Ryrn0NyQ2wJhO5hMWn4oi0tHe5tr81DDr6fNSsnHjrvLrNCUbxFadHsknR3WdFMR/w640-h386/utas4.png" width="640" /></a></div><p class="MsoNormal"><br /></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;">Are these to fund the Hobart CDB
move? If so, can we expect them for the next 10 years. If so, how will
restructuring costs, and core activities for that matter, be funded when
investment returns diminish? With subdued markets looking a distinct
possibility and perhaps more significantly as UTAS funds its Hobart CDB move,
investments will be redeemed, and investment returns will be much lower. <o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;">Will core activities and restructure
costs continue to be funded by borrowings? To be repaid when the proceeds from
the Sandy Bay development are received? An alternative doesn’t readily spring
to mind.<o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;">That’s UTAS’ financial plan. It’s not
what the spin doctors are saying but it’s what the financial statements reveal.<o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;">Is the government taking notice? UTAS
are selling off the family jewels just so they can keep funding core deficits
and keep paying restructure cost to consultants who keep telling them the
Hobart CDB move will be worth it.<o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="mso-bookmark: _Hlk138769585;"><span style="font-size: 14pt; line-height: 107%;">We weren’t told the existing model
was broken. We were told the existing buildings were no longer fit for purpose
and nostalgia shouldn’t stand in the way of progress.</span></span><a href="file:///C:/Users/John%20&amp;%20Julie/Documents/JWL/UTAS%208%20year%20overview%20V2.docx#_ftn4" name="_ftnref4" style="mso-footnote-id: ftn4;" title=""><span style="mso-bookmark: _Hlk138769585;"><span class="MsoFootnoteReference"><span style="font-size: 14pt; line-height: 107%;"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[4]</span></span><!--[endif]--></span></span></span></span></a><span style="mso-bookmark: _Hlk138769585;"></span><span style="font-size: 14pt; line-height: 107%;"><o:p></o:p></span></p>
<p class="MsoNormal"><b><span style="font-size: 20pt; line-height: 107%;">Cash
flows<o:p></o:p></span></b></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">Perhaps more
significant than net profit is UTAS’ net operating cash. This underpins the
sustainability of any organisation. 2022 witnessed UTAS’ lowest net operating
cash result since 2015.<o:p></o:p></span></p>
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjuc-dHncNPr11al4K_Amij2ud4oVrzE121Wdzyy65GTTs3yMvVrUNIP3MjYBYR1hxnO0AA04iz5mpDQBeIwsNnIchIlKqTixRGPweuYNUstJs5mFpBf5Lr-C9gMRroR1IjOUjDjfRDVWtnUXSUSfkBDzmAnRzX8dyXY3zbKOlT16OKTAKWq4M6SXsSrW5m/s480/utas5.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="324" data-original-width="480" height="432" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjuc-dHncNPr11al4K_Amij2ud4oVrzE121Wdzyy65GTTs3yMvVrUNIP3MjYBYR1hxnO0AA04iz5mpDQBeIwsNnIchIlKqTixRGPweuYNUstJs5mFpBf5Lr-C9gMRroR1IjOUjDjfRDVWtnUXSUSfkBDzmAnRzX8dyXY3zbKOlT16OKTAKWq4M6SXsSrW5m/w640-h432/utas5.png" width="640" /></a></div><p class="MsoNormal"><br /></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">In 2022 the
net operating cash of $32.1 million was less than net profits of $43 million.
For most entities the reverse is true as non-cash items such as depreciation
usually means more cash than the net profit figure suggests. But UTAS has some characteristics
which means cash flow for capex works and repaying borrowings will be harder. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">But first let’s
look at where net operating cash sits in the larger picture. The following is a
summary of the cash inflows and outflows over the last eight years:<o:p></o:p></span></p>
<table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; mso-padding-alt: 0cm 5.4pt 0cm 5.4pt; mso-yfti-tbllook: 1184; width: 301px;">
<tbody><tr style="height: 18.75pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
<td colspan="2" nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 226pt;" valign="bottom" width="301">
<p align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">UTAS CASH FLOW 2015 to 2022 $m<o:p></o:p></span></b></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 1;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 188.85pt;" valign="bottom" width="252">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><b><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Inflow<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 37.15pt;" valign="bottom" width="50"></td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 2;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 188.85pt;" valign="bottom" width="252">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Net operating cash<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 37.15pt;" valign="bottom" width="50">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">461.7<o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 3;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 188.85pt;" valign="bottom" width="252">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Capital grants<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 37.15pt;" valign="bottom" width="50">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">301.0<o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 4;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 188.85pt;" valign="bottom" width="252">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Borrowings net<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 37.15pt;" valign="bottom" width="50">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">242.9<o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 5;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 188.85pt;" valign="bottom" width="252">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">PBSA proceeds<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 37.15pt;" valign="bottom" width="50">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">203.4<o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 6;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 188.85pt;" valign="bottom" width="252">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><b><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Outflow<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 37.15pt;" valign="bottom" width="50"></td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 7;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 188.85pt;" valign="bottom" width="252">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Purchases PPE net<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 37.15pt;" valign="bottom" width="50">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">911.4</span><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 8;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 188.85pt;" valign="bottom" width="252">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Purchase intangibles<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 37.15pt;" valign="bottom" width="50">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">63.0</span><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 9;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 188.85pt;" valign="bottom" width="252">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Investments net<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 37.15pt;" valign="bottom" width="50">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">145.7</span><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 10;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 188.85pt;" valign="bottom" width="252">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Other<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 37.15pt;" valign="bottom" width="50">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">7.5</span><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 11;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 188.85pt;" valign="bottom" width="252"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 37.15pt;" valign="bottom" width="50"></td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 12;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 188.85pt;" valign="bottom" width="252">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><b><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Net increase/(decrease) cash<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 37.15pt;" valign="bottom" width="50">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">81.4<o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 13;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 188.85pt;" valign="bottom" width="252"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 37.15pt;" valign="bottom" width="50"></td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 14;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 188.85pt;" valign="bottom" width="252">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><b><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Opening cash<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 37.15pt;" valign="bottom" width="50">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">48.2<o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 15; mso-yfti-lastrow: yes;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 188.85pt;" valign="bottom" width="252">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><b><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Closing cash <o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 37.15pt;" valign="bottom" width="50">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">129.7<o:p></o:p></span></p>
</td>
</tr>
</tbody></table>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">That’s UTAS
in a nutshell. By way of explanation:<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpFirst" style="mso-list: l1 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 107%;">Net
operating cash over 8 years totalled $461.7 million an average of $58 pa. As we
have seen the 2022 figure was $32.1 million.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l1 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 107%;">Capital
grants from both the Federal and State governments totalled $301 m. These are
amounts intended for specific building projects.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l1 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 107%;">Net
borrowings comprise net increases in borrowings over the period. Most occurred
in the 2022 year with the $350 m Green Bond capital raising and the repayment
of the Tascorp loan of $70 million. <o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l1 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 107%;">The
PBSA (Purpose Built Student Accommodation) proceeds of $203.4 million comprise
the 2x amounts received in 2017 and 2021 when UTAS forward sold 30 years of
rents in respect of some student accommodation facilities (the Spark Living
deal). UTAS retains the underlying property, but Spark Living has bought the
rights to net rents for a 30-year period. The land and buildings which are part
of the deal are now described in UTAS’ books as a Service Concession asset. The
lump sum received is recorded as a liability, as a revenue in advance amount,
being the grant of the right to operate the PBSA over 30 years. Each year Spark
Living receives the net rents plus whatever other amounts are part of the deal,
and UTAS amortises/writes off a portion of the liability and includes the
amount as revenue in that year. In 30 years’ time the liability will disappear.
Each year however UTAS accounts will include the amortised portion as income.
But alas there won’t be an accompanying cash boost as Spark Living will pocket
the net rents. Paying off liabilities like the Spark Living deal means
operating cash will be less than net profits.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l1 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 107%;">Purchases
of PPE (property plant and equipment) are the capex amounts, mainly land,
buildings and the ensuing upgrades.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l1 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 107%;">Intangibles
mostly refers to software purchases, but also includes a 20-year license for
484 car parking spaces in Launceston which cost $5.5 million in 2022.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpLast" style="mso-list: l1 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 107%;">Net
investments of $145.7million were bought over 8 years. In 2022 $96 million of
investments were purchased using some of the proceeds from the $350 Green Bond
issue in 2022. 2022 wasn’t a great year to overdose on new investments as UTAS’
investment portfolio suffered unrealised losses of $35.5 million. <o:p></o:p></span></p>
<p class="MsoNormal"><b><span style="font-size: 20pt; line-height: 107%;">Balance
sheet<o:p></o:p></span></b></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">Now to turn
to UTAS’ statement of financial position, its balance sheet. The following sets
out the position in 2015 compared to eight years later in 2022.<o:p></o:p></span></p>
<table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; mso-padding-alt: 0cm 5.4pt 0cm 5.4pt; mso-yfti-tbllook: 1184; width: 417px;">
<tbody><tr style="height: 18.75pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
<td colspan="3" nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 313.05pt;" valign="bottom" width="417">
<p align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">UTAS BALANCE SHEET $M<o:p></o:p></span></b></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 1;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 213.25pt;" valign="bottom" width="284"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2015<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2022<o:p></o:p></span></b></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 2;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 213.25pt;" valign="bottom" width="284">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><b><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Assets<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67"></td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 3;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 213.25pt;" valign="bottom" width="284">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Cash<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">44.3 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">129.7 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 4;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 213.25pt;" valign="bottom" width="284">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Receivables & contract assets<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">31.3 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">73.7 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 5;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 213.25pt;" valign="bottom" width="284">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Investments<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">279.9 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">547.1 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 6;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 213.25pt;" valign="bottom" width="284">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">PPE/ PBSA<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">745.6 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">1,423.8 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 7;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 213.25pt;" valign="bottom" width="284">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Intangibles<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">47.8 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">55.4 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 8;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 213.25pt;" valign="bottom" width="284">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Other non-fin assets<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">9.6 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">24.9 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 9;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 213.25pt;" valign="bottom" width="284">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><b><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Total assets<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">1,158.5 <o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2,254.5 <o:p></o:p></span></b></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 10;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 213.25pt;" valign="bottom" width="284"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67"></td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 11;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 213.25pt;" valign="bottom" width="284">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><b><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Liabilities<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67"></td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 12;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 213.25pt;" valign="bottom" width="284">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Payables<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">41.6 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">73.0 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 13;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 213.25pt;" valign="bottom" width="284">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Borrowings<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">118.6 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">360.0 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 14;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 213.25pt;" valign="bottom" width="284">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Provisions<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">79.3 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">104.3 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 15;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 213.25pt;" valign="bottom" width="284">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Contract liabilities<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">0.0 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">189.2 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 16;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 213.25pt;" valign="bottom" width="284">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Other liabilities<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">19.1 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">174.9 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 17;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 213.25pt;" valign="bottom" width="284">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><b><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Total liabilities<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">258.6 <o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">901.4 <o:p></o:p></span></b></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 18;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 213.25pt;" valign="bottom" width="284"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67"></td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 19;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 213.25pt;" valign="bottom" width="284">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><b><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Net assets<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">899.8 <o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">1,353.2 <o:p></o:p></span></b></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 20;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 213.25pt;" valign="bottom" width="284"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67"></td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 21;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 213.25pt;" valign="bottom" width="284">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><b><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Equity<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67"></td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 22;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 213.25pt;" valign="bottom" width="284">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Statutory Funds<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">149.2 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">146.5 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 23;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 213.25pt;" valign="bottom" width="284">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Reserves<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">279.0 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">383.8 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 24;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 213.25pt;" valign="bottom" width="284">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 14pt;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Retained earnings<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">471.7 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">822.8 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 18.75pt; mso-yfti-irow: 25; mso-yfti-lastrow: yes;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 213.25pt;" valign="bottom" width="284">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><b><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Total equity<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">899.8 <o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 49.9pt;" valign="bottom" width="67">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; font-size: 14pt; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">1,353.2 <o:p></o:p></span></b></p>
</td>
</tr>
</tbody></table>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">By way of
explanation:<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpFirst" style="mso-list: l0 level1 lfo2; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 107%;">Cash
is self-explanatory. The abnormally high balance in 2002 partly reflects the
proceeds of the 2022 Green Bond issue. <o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo2; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 107%;">Receivables
and contract assets are amounts due for services rendered.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo2; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 107%;">Investments
are shares and managed funds. The amount grew with the Spark Living receipts
(in 2017 and 2021) and with some of the Green Bond proceeds in 2022.<span style="mso-spacerun: yes;"> </span>At the end of 2022, approximately 60 per cent
or $317 million is listed as a current asset, with the remainder of $230
million listed as non-current. The current portion is likely to be redeemed
soon to help fund the Hobart CBD move, at least once most of the cash
disappears which will almost certainly happen in the 2023 year. The non-current
portion is safer (see below comment on statutory funds).<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo2; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 107%;">PPE/PBSA
are fixed assets of land buildings and plant, predominantly land and buildings.
The increase is due to the amounts spent (see above comments on the cash flow
statement) but also to the 2022 revaluation of $167 million, not included in
net profits, rather in the broader measure of comprehensive income. The only
other previous significant revaluation was a $58 million loss in 2017. The
growth in the value of PPE is quite modest given what has been spent on new
acquisitions and updates. Maybe commercial property may not have increased at the
rate achieved by residential property? Or maybe as has often been alleged, UTAS
overpaid for some of its acquisitions?<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo2; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 107%;">Intangibles
are software purchases(mainly).<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo2; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 107%;">Payables
are payments due. There was a $28 million jump in the 2022 year, almost
certainly due to PPE amounts payable.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l1 level1 lfo1; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 107%;">Borrowings
in 2022 include the $350 million Green Bonds plus assorted leases. Bonds are
interest only borrowings. $280 million have a 10-year term. The remainder of
$70 million have a 20-year term.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo2; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 107%;">Provisions
mainly relate to employee entitlements such as annual leave and long service
leave, but also includes a $14 million provision for wages due in respect of
wage theft which occurred from 2014 to 2021. A liability of $11 million was
included in the 2021 accounts at the last moment, listed as a current liability
meaning it was expected to be paid in the 2022 year. It is still unpaid and is
now listed as a $14 million liability.<a href="file:///C:/Users/John%20&amp;%20Julie/Documents/JWL/UTAS%208%20year%20overview%20V2.docx#_ftn5" name="_ftnref5" style="mso-footnote-id: ftn5;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[5]</span></span><!--[endif]--></span></span></a>
The 2022 Annual Report hinted at the reason for the delay. It became a ‘bespoke
internal audit project’<a href="file:///C:/Users/John%20&amp;%20Julie/Documents/JWL/UTAS%208%20year%20overview%20V2.docx#_ftn6" name="_ftnref6" style="mso-footnote-id: ftn6;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[6]</span></span><!--[endif]--></span></span></a>
which necessitated, you guessed it, more consultants.<a href="file:///C:/Users/John%20&amp;%20Julie/Documents/JWL/UTAS%208%20year%20overview%20V2.docx#_ftn7" name="_ftnref7" style="mso-footnote-id: ftn7;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[7]</span></span><!--[endif]--></span></span></a><o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo2; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 107%;">Contract
liabilities ($189.2 million in 2022) related to revenue in advance amounts
including research grants, capital grants and other unspent Australian
government assistance. When received these are recorded as revenue in advance.
Cash balances increase but there is no profit effect. When spent, cash is impacted,
but the profit effect is nil as a rule. The reduced liability is booked as
revenue at the same time as there is an offsetting expense. Managing contracted
liabilities is therefore a cash flow exercise.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo2; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 107%;">Other
liabilities ($174.9 million in 2022) represent the yet to be amortised portion
of the $203.4 million received from Spark Living. The amortised portion each
year boosts profits but there’s no cash as the net rents are diverted to Spark
Living each year.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo2; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 107%;">Re
contract and other liabilities, it needs to be understood how these impacts
profits and cash flows differently. Receiving revenue in advance amounts
including lump sum rentals in advance from Spark Living, is welcome when
received but painful when repaid/spent. What will tend to happen is that low
net profit amounts will be accompanied by even lower operating cash flows.
That’s the reality that UTAS must deal with.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo2; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 107%;">Statutory
funds ($146.5 million in 2022) are quasi equity amounts included with equity,
being funds that cannot be used for general expenditure purposes. Included here
are trust funds and endowments used to fund scholarships etc. There will be
corresponding cash/investments on the asset side with restricted access.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo2; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 107%;">Reserves
are principally the revaluation of land and buildings which are kept separate
from retained earnings in Equity. The 2022 year saw a $167 million increase in
the revaluation reserve.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpLast" style="mso-list: l0 level1 lfo2; text-indent: -18pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14pt; line-height: 107%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14pt; line-height: 107%;">Retained
earnings are self-explanatory, being the accumulated net profits earned and
retained by UTAS. UTAS doesn’t pay dividends.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">It’s a
fairly tidy balance sheet, with just a few peculiarities which will impact UTAS
in the future.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">However, to
get a clearer picture of UTAS over the past 8 years the following chart will
assist:<o:p></o:p></span></p>
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgDaSWLZiI2qjFenxGTbj0we7sIY5tz5OhuysunIREH5wj3nT30GS6ea_MOHVdoBx-LGky4xs0uTE7i--gp0fV3lvuM2yXGQCz1dVrRSzmE3NbLM_O8PxHlZDBQ8zQeykj7FRDCKnLri_6cjt2vW0ll08OtWt7fzOKGAqzPKnOXauGrLd0vJfu3o2qU8_MX/s480/utas6.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="354" data-original-width="480" height="472" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgDaSWLZiI2qjFenxGTbj0we7sIY5tz5OhuysunIREH5wj3nT30GS6ea_MOHVdoBx-LGky4xs0uTE7i--gp0fV3lvuM2yXGQCz1dVrRSzmE3NbLM_O8PxHlZDBQ8zQeykj7FRDCKnLri_6cjt2vW0ll08OtWt7fzOKGAqzPKnOXauGrLd0vJfu3o2qU8_MX/w640-h472/utas6.png" width="640" /></a></div><p class="MsoNormal"><br /></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">This shows
the increases in index form with the 2015 year equal to 100. In eight years,
liabilities have increased by 350 per cent yet net equity has grown by a mere
150 per cent. And that includes the $167 million revaluation of land and
building in 2022.<o:p></o:p></span></p>
<p class="MsoNormal"><b><span style="font-size: 20pt; line-height: 107%;"><o:p> </o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-size: 20pt; line-height: 107%;">UTAS in
transition<o:p></o:p></span></b></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">If nothing
else UTAS’s financials indicate it is a vastly different operation than it was
8 years ago. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">As I said in
my original submission to this inquiry:<o:p></o:p></span></p>
<p class="MsoNormal"><i><span style="font-size: 14pt; line-height: 107%;">“It
mustn’t be forgotten that the federal government is largely responsible for
setting the parameters that have pushed universities in the direction all have
taken.”<o:p></o:p></span></i></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">It’s an oft
repeated mantra by consultants and other profit whisperers that governments and
public bodies have ‘lazy’ balance sheets, and they should take a leaf out of
the private sector’s book. Arguably UTAS has been persuaded to swallow the
whole book. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">The current State
government often asserts its financial management has left us with a strong
balance sheet which we shouldn’t be afraid to leverage. There’s a skerrick of
truth . We may have a strong balance sheet but as yet haven’t devised a way to
service extra borrowings. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">In UTAS’s
case the same is true, but it has the additional burden of borrowings disguised
as other liabilities (the Spark Living deal) and other revenue in advance
amounts on its balance sheet.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">It’s not too
difficult to pinpoint the private gains that will flow from UTAS’ moves, to the
papers shufflers and hangers-on. But what about the public gains. UTAS has said
it expects to make $200 million from the transition. Then again, the Green Bond
proceeds were expected to tide it over until surplus Sandy Bay assets started
selling. Which it clearly won’t.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;"><span style="mso-spacerun: yes;"> </span>What about UTAS’ core business? How will the crucial
financial metric of profit from the core activities of teaching and research be
impacted by the Hobart move, as distinct from remaining at the existing
campus?<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">With all the
recent public discussions about the role of universities, whether a profit-making
goal should be a performance indicator for the delivery of public goods like
higher educations is a moot point. But this is outside the Committee’s Terms of
Reference. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">Returning to
UTAS’ current financial situation, there are other commitments that aren’t
included on its balance sheet relating to the Northern Transformation. Note 25
in UTAS’ 2022 Annual Report revealed there is $108 million of bills mostly for Launceston
redevelopment which will be paid in 2023 and another $22 million in subsequent
years.<a href="file:///C:/Users/John%20&amp;%20Julie/Documents/JWL/UTAS%208%20year%20overview%20V2.docx#_ftn8" name="_ftnref8" style="mso-footnote-id: ftn8;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[8]</span></span><!--[endif]--></span></span></a>
Together with the $14 million back wages and the capex bills included in
payables means most of the cash at the end of 2022 will disappear. It may have
happened already.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">Next will be
a run down in investments as UTAS continues its mission to rearrange Hobart. Given
that UTAS needs to hold probably $200 million in cash or restricted assets
either because it’s a strict requirement (trust funds etc) or because prudent
management leaves no alternative (contracted liabilities etc) there may be $300
million or so of investments that can be redeemed soon to keep the dream alive.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">In 2019 we
learnt it was going to cost $600 million for UTAS to build its new facilities
in the Hobart CDB.<a href="file:///C:/Users/John%20&amp;%20Julie/Documents/JWL/UTAS%208%20year%20overview%20V2.docx#_ftn9" name="_ftnref9" style="mso-footnote-id: ftn9;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[9]</span></span><!--[endif]--></span></span></a>
Early in 2023 The Mercury reported sizable cost blow outs on one of the
building refurbishments.<a href="file:///C:/Users/John%20&amp;%20Julie/Documents/JWL/UTAS%208%20year%20overview%20V2.docx#_ftn10" name="_ftnref10" style="mso-footnote-id: ftn10;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[10]</span></span><!--[endif]--></span></span></a>
It’s hard to imagine there won’t be more. Capital works have barely begun.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">There are
scary times ahead. UTAS is a novice property developer, which makes delays more
likely. The governing Council doesn’t appear to be over endowed with the
necessary experience and skill sets to navigate its way in a sea infested with
charlatans and pwcers. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">If UTAS proceeds
with its move to the Hobart CDB it will soon need more borrowed funds, probably
sometime in the next 12 to 24 months. That of course will require the
Treasurer’s approval pursuant to Sec 7(2) of the University of Tasmania Act
1992.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">It is not
clear exactly why UTAS ditched Tascorp as a lender early in 2022 preferring
instead to raise $350 million via the Green Bond issue. But it is likely to have
been Tascorp’s more extensive due diligence procedures, possibly, shock horror,
even having a detailed look at UTAS plans to move into Hobart City and the
residential development of the Sandy Bay campus. UTAS would have needed to
surrender some security as well as providing a few more details about some of
the financial assumptions underpinning the dream.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">Different
from conventional lenders like Tascorp, Green Bond holders don’t hold specific
security. They are comforted by representations made to them by UTAS and its
agents and by Moody’s. The Green Bond issue effectively has given UTAS a carte
blanche opportunity to do as it pleases. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">At least until
it runs out of money and needs to front the Treasurer with an Oliver Twist
impersonation. Please Sir, I want some more.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">This is
likely to happen in the not-too-distant future. That is why this Committee need
to carefully consider its views on Sec 7(2). What is the underlying intention?
Has it worked as intended? If not, what changes need to be made?<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">There are
also diverging views on the extent of implicit guarantees for UTAS’ borrowings.
Prof Black told the Committee on 4<sup>th</sup> May 2023:<a href="file:///C:/Users/John%20&amp;%20Julie/Documents/JWL/UTAS%208%20year%20overview%20V2.docx#_ftn11" name="_ftnref11" style="mso-footnote-id: ftn11;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[11]</span></span><!--[endif]--></span></span></a><o:p></o:p></span></p>
<p class="MsoNormal"><i><span style="font-size: 14pt; line-height: 107%;">“Because
it is an institution of the state - and in the end, this will come to the kind
of view of ratings agencies - there has always been an implicit assumption that
should the university ultimately be in financial trouble, that would come to be
a liability of the state's credit under the state act. In a university of our
scale that could be a material matter for the state, so it is the kind of thing
that ratings agencies give consideration to when they are evaluating states as
to what their potential exposure to liabilities would be. The technical ways in
which that is done are complex, but that is why it does matter, because in the
end we are an entity of the state.”<o:p></o:p></span></i></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">It’s hard to
accept Prof Black believes UTAS is simply an entity of the State. Maybe he is
sending a signal to the government that he’ll be needing some bailout funds
soon. Is he laying the groundwork before approaching the government with his
demands? <span style="mso-spacerun: yes;"> </span>Moral hazard and the too-big-to-fail
mentality mean governments everywhere get bullied.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">If UTAS is
an entity of the state, the UTAS Act needs to change to reflect this, and the
Treasurer needs to confirm it in the Treasurer’s Annual Financial Report each
year. Arguably it also needs to be disclosed in UTAS’s Annual Report.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;">Maybe
Moody’s too believes the State government will always back UTAS. That’s why it gave
it the same credit rating. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Or maybe that’s because Moody’s
believes the Commonwealth government will come to the party when needed, as it
would if a State got into real trouble. Moody’s told potential subscribers to
the Green Bond issue that there is “<em><span face=""Calibri",sans-serif" style="background: white; color: #7b7b7b; mso-ascii-theme-font: minor-latin; mso-bidi-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">a high likelihood of extraordinary
support from the </span></em><strong><span face=""Calibri",sans-serif" style="background: white; color: #7b7b7b; font-weight: normal; mso-ascii-theme-font: minor-latin; mso-bidi-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">Commonwealth</span></strong><em><b><span face=""Calibri",sans-serif" style="background: white; color: #7b7b7b; mso-ascii-theme-font: minor-latin; mso-bidi-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;"> </span></b></em><em><span face=""Calibri",sans-serif" style="background: white; color: #7b7b7b; mso-ascii-theme-font: minor-latin; mso-bidi-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">in the event of acute liquidity
stress.”</span></em><a href="file:///C:/Users/John%20&amp;%20Julie/Documents/JWL/UTAS%208%20year%20overview%20V2.docx#_ftn12" name="_ftnref12" style="mso-footnote-id: ftn12;" title=""><span class="MsoFootnoteReference"><i><span style="background: white; color: #7b7b7b;"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><b style="mso-bidi-font-weight: normal;"><span face=""Calibri",sans-serif" style="background: white; color: #7b7b7b; font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[12]</span></b></span><!--[endif]--></span></span></i></span></a><em><span face=""Calibri",sans-serif" style="background: white; color: #7b7b7b; mso-ascii-theme-font: minor-latin; mso-bidi-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;"><o:p></o:p></span></em></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">These are not esoteric matters that
can be let through to the ‘keeper. They need to be sorted sooner rather than
later.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Ordinarily if an entity starts
incurring cost blowouts for a crucial project and needs to borrow more, bond
holders who rank behind secured creditors will sit up and take notice. The
credit rating of the entity may change<a href="file:///C:/Users/John%20&amp;%20Julie/Documents/JWL/UTAS%208%20year%20overview%20V2.docx#_ftn13" name="_ftnref13" style="mso-footnote-id: ftn13;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 14pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[13]</span></span><!--[endif]--></span></span></a>.
A fall in bond prices (on the secondary market) is a real possibility. Bond
holders will suffer capital losses if they dispose of their holdings. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">If all this transpires when the
underlying government guarantees are better and more widely understood, bond
holders might well have an argument of being misled into believing UTAS was an
institution that will always be backed by governments. Is this the case?<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Distressed bondholders selling to
vulture funds all too willing to take on bond issuers are an ugly reality of today’s
over-financialised world. The last thing a government would wish for is a
public battle of this nature. That’s why if it ever happened it is sure to be
settled out of the limelight at great cost to Tasmanians.<o:p></o:p></span></p>
<p class="MsoNormal"><em><span face=""Calibri",sans-serif" style="background: white; color: #7b7b7b; font-size: 14pt; font-style: normal; line-height: 107%; mso-ascii-theme-font: minor-latin; mso-bidi-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;"><o:p> </o:p></span></em></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;"><o:p> </o:p></span></p>
<p class="MsoNormal"><b><span style="font-size: 20pt; line-height: 107%;">Appendix:
8 years data (from UTAS Annual Reports)<o:p></o:p></span></b></p>
<table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; mso-padding-alt: 0cm 5.4pt 0cm 5.4pt; mso-yfti-tbllook: 1184; width: 1240px;">
<tbody><tr style="height: 18.75pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0; mso-yfti-lastrow: yes;">
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 694.65pt;" valign="bottom" width="926">
<table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; mso-padding-alt: 0cm 5.4pt 0cm 5.4pt; mso-yfti-tbllook: 1184; width: 635px;">
<tbody><tr style="height: 18.75pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
<td colspan="2" nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 188pt;" valign="bottom" width="251">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">UTAS
P&L SUMMARY<span style="mso-spacerun: yes;"> </span>2015 to 2022 $m<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 53pt;" valign="bottom" width="71"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 1;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 156.65pt;" valign="bottom" width="209"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.35pt;" valign="bottom" width="42">
<p align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2015<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 53pt;" valign="bottom" width="71">
<p align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2016<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2017<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2018<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2019<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2020<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2021<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2022<o:p></o:p></span></b></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 2;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 156.65pt;" valign="bottom" width="209"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.35pt;" valign="bottom" width="42"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 53pt;" valign="bottom" width="71"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 3;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 156.65pt;" valign="bottom" width="209">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Revenue<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.35pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">599.6<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 53pt;" valign="bottom" width="71">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">617.6<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">679.2<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">712.3<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">777.0<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">718.9<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">863.5<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">769.1<o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 4;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 156.65pt;" valign="bottom" width="209"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.35pt;" valign="bottom" width="42"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 53pt;" valign="bottom" width="71"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 5;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 156.65pt;" valign="bottom" width="209">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Expenses<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.35pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">590.7<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 53pt;" valign="bottom" width="71">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">602.7<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">620.3<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">653.2<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">703.6<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">700.4<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">697.6<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">726.1<o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 6;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 156.65pt;" valign="bottom" width="209"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.35pt;" valign="bottom" width="42"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 53pt;" valign="bottom" width="71"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 7;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 156.65pt;" valign="bottom" width="209">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Net
profit<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.35pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">8.9<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 53pt;" valign="bottom" width="71">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">14.9<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">58.9<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">59.1<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">73.5<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">18.5<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">165.9<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">43.1<o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 8;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 156.65pt;" valign="bottom" width="209"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.35pt;" valign="bottom" width="42"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 53pt;" valign="bottom" width="71"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 9;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 156.65pt;" valign="bottom" width="209"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.35pt;" valign="bottom" width="42"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 53pt;" valign="bottom" width="71"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 10;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 156.65pt;" valign="bottom" width="209">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Summary
net profits<a href="file:///C:/Users/John%20&amp;%20Julie/Documents/JWL/UTAS%208%20year%20overview%20V2.docx#_ftn14" name="_ftnref14" style="mso-footnote-id: ftn14;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><b style="mso-bidi-font-weight: normal;"><span face=""Calibri",sans-serif" style="color: black; font-size: 11pt; line-height: 107%; mso-ansi-language: EN-AU; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">[14]</span></b></span><!--[endif]--></span></span></a>
<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.35pt;" valign="bottom" width="42"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 53pt;" valign="bottom" width="71"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 11;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 156.65pt;" valign="bottom" width="209">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 11pt;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Capital grants<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.35pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">6.7<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 53pt;" valign="bottom" width="71">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">17.5<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">27.1<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">23.0<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">17.8<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">26.5<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">48.4<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">97.5<o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 12;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 156.65pt;" valign="bottom" width="209">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 11pt;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Net investment income<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.35pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">23.2<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 53pt;" valign="bottom" width="71">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">16.7<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">28.7<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">6.8<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">72.3<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">0.1<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">104.1<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">37.6</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 13;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 156.65pt;" valign="bottom" width="209">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 11pt;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Net movement stat funds<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.35pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">6.5<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 53pt;" valign="bottom" width="71">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">4.0<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">4.9<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">23.4<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2.0</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">4.2<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">19.4<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">4.9<o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 14;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 156.65pt;" valign="bottom" width="209">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 11pt;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Core activities <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.35pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">9.0</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 53pt;" valign="bottom" width="71">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">9.4</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">8.7<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">3.6</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">1.9</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">3.7<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">1.2</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">18.9</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 15;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 156.65pt;" valign="bottom" width="209">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 11pt;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Other<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.35pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">17.4</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 53pt;" valign="bottom" width="71">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">7.4</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">0.0<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">11.5<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">1.6</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">0.0<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">0.0</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">0.0</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 16;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 156.65pt;" valign="bottom" width="209">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 11pt;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Restructuring costs<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.35pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">1.1</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 53pt;" valign="bottom" width="71">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">6.5</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">10.5</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2.0</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">11.1</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">16.0</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">4.7</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2.8</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 17;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 156.65pt;" valign="bottom" width="209">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Total <o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.35pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">8.9<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 53pt;" valign="bottom" width="71">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">14.9<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">58.9<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">59.1<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">73.5<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">18.5<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">165.9<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">43.1<o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 18;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 156.65pt;" valign="bottom" width="209"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.35pt;" valign="bottom" width="42"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 53pt;" valign="bottom" width="71"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 19;">
<td colspan="2" nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 188pt;" valign="bottom" width="251">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Reconciliation
op cash & net profit<a href="file:///C:/Users/John%20&amp;%20Julie/Documents/JWL/UTAS%208%20year%20overview%20V2.docx#_ftn15" name="_ftnref15" style="mso-footnote-id: ftn15;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><b style="mso-bidi-font-weight: normal;"><span face=""Calibri",sans-serif" style="color: black; font-size: 11pt; line-height: 107%; mso-ansi-language: EN-AU; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;">[15]</span></b></span><!--[endif]--></span></span></a><span style="mso-spacerun: yes;"> </span>$m<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 53pt;" valign="bottom" width="71"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 20;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 156.65pt;" valign="bottom" width="209">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Net
profit<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.35pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">8.9<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 53pt;" valign="bottom" width="71">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">14.9<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">58.9<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">59.1<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">73.5<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">18.5<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">165.9<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">43.1<o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 21;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 156.65pt;" valign="bottom" width="209">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Adjustments<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.35pt;" valign="bottom" width="42"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 53pt;" valign="bottom" width="71"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 22;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 156.65pt;" valign="bottom" width="209">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 11pt;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Capital grants<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.35pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">5.8</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 53pt;" valign="bottom" width="71">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">17.5</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">27.1</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">23.0</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">17.8</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">64.6</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">105.0</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">40.3</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 23;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 156.65pt;" valign="bottom" width="209">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 11pt;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Non-cash adjustments<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.35pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">40.6<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 53pt;" valign="bottom" width="71">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">33.5<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">14.1<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">55.5<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">24.6</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">57.8<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">18.2</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">77.5<o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 24;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 156.65pt;" valign="bottom" width="209">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 11pt;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Asset/liability changes<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.35pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2.6</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 53pt;" valign="bottom" width="71">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">24.9<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2.7<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">14.7</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">9.7<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">72.7<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">39.0<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">48.2</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 25;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 156.65pt;" valign="bottom" width="209"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.35pt;" valign="bottom" width="42"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 53pt;" valign="bottom" width="71"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 26; mso-yfti-lastrow: yes;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 156.65pt;" valign="bottom" width="209">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Net
operating cash<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.35pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">41.1<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 53pt;" valign="bottom" width="71">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">55.9<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">48.6<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">76.9<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">40.8<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">84.5<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">81.8<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">32.1<o:p></o:p></span></b></p>
</td>
</tr>
</tbody></table>
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p> </o:p></span></b></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><span style="font-family: "Times New Roman",serif; font-size: 10pt; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;"><o:p> </o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><span style="font-family: "Times New Roman",serif; font-size: 10pt; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;"><o:p> </o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><span style="font-family: "Times New Roman",serif; font-size: 10pt; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;"><o:p> </o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><span style="font-family: "Times New Roman",serif; font-size: 10pt; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;"><o:p> </o:p></span></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><span style="font-family: "Times New Roman",serif; font-size: 10pt; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-ligatures: none;"><o:p> </o:p></span></p>
</td>
</tr>
</tbody></table>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;"><o:p> </o:p></span></p>
<table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; mso-padding-alt: 0cm 5.4pt 0cm 5.4pt; mso-yfti-tbllook: 1184; width: 635px;">
<tbody><tr style="height: 18.75pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
<td colspan="3" nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 241pt;" valign="bottom" width="321">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">UTAS<span style="mso-spacerun: yes;"> </span>CASH FLOW SUMMARY 2015 to 2022 $m<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 1;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 177.7pt;" valign="bottom" width="237"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.65pt;" valign="bottom" width="42">
<p align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2015<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.65pt;" valign="bottom" width="42">
<p align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2016<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2017<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2018<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2019<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2020<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2021<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="center" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: center;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2022<o:p></o:p></span></b></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 2;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 177.7pt;" valign="bottom" width="237"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.65pt;" valign="bottom" width="42"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.65pt;" valign="bottom" width="42"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 3;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 177.7pt;" valign="bottom" width="237">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Inflow<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.65pt;" valign="bottom" width="42"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.65pt;" valign="bottom" width="42"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 4;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 177.7pt;" valign="bottom" width="237">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 11pt;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Net operating cash<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.65pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">41.1<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.65pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">55.9<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">48.6<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">76.9<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">40.8<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">84.5<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">81.8<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">32.1<o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 5;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 177.7pt;" valign="bottom" width="237">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 11pt;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Capital grants<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.65pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">5.8<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.65pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">17.5<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">27.1<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">23.0<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">17.8<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">64.6<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">105.0<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">40.3<o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 6;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 177.7pt;" valign="bottom" width="237">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 11pt;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Borrowings net<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.65pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">23.0<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.65pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">15.5</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">9.5</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">0.0<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">97.6<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">71.6</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">58.1</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">277.1<o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 7;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 177.7pt;" valign="bottom" width="237">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 11pt;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">PBSA proceeds<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.65pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">0.0<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.65pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">0.0<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">132.6<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">0.0<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">0.0<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">0.0<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">70.8<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">0.0<o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 8;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 177.7pt;" valign="bottom" width="237">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Outflow<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.65pt;" valign="bottom" width="42"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.65pt;" valign="bottom" width="42"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 9;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 177.7pt;" valign="bottom" width="237">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 11pt;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Purchases PPE net<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.65pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">92.9</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.65pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">73.4</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">51.6</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">97.1</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">188.2</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">75.2</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">215.3</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">117.6</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 10;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 177.7pt;" valign="bottom" width="237">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 11pt;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Purchase intangibles<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.65pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">5.4</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.65pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">6.8</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">8.7</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">6.9</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">9.7</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2.6</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">3.2</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">19.7</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 11;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 177.7pt;" valign="bottom" width="237">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 11pt;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Investments net<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.65pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">25.3<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.65pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">4.5</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">112.9</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">0.8<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">26.1<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">34.1<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">18.9</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">95.6</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 12;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 177.7pt;" valign="bottom" width="237">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 11pt;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Other<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.65pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">0.8</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.65pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">0.0</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">1.0</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">1.6</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2.5</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">0.3</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">1.2</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">0.1</span><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 13;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 177.7pt;" valign="bottom" width="237"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.65pt;" valign="bottom" width="42"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.65pt;" valign="bottom" width="42"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 14;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 177.7pt;" valign="bottom" width="237">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Net increase/(decrease)
cash<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.65pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">4.0</span></b><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.65pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">26.8</span></b><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">24.6<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">4.9</span></b><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">18.2</span></b><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">33.4<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: red; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">39.2</span></b><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;"><o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">116.5<o:p></o:p></span></b></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 15;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 177.7pt;" valign="bottom" width="237"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.65pt;" valign="bottom" width="42"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.65pt;" valign="bottom" width="42"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 16;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 177.7pt;" valign="bottom" width="237">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Opening
cash<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.65pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">48.2<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.65pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">44.3<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">17.4<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">42.0<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">37.1<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">18.9<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">52.3<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">13.1<o:p></o:p></span></b></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 17; mso-yfti-lastrow: yes;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 177.7pt;" valign="bottom" width="237">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Closing
cash <o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.65pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">44.3<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 31.65pt;" valign="bottom" width="42">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">17.4<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">42.0<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">37.1<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">18.9<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">52.3<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">13.1<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">129.7<o:p></o:p></span></b></p>
</td>
</tr>
</tbody></table>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;"><o:p> </o:p></span></p>
<table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; mso-padding-alt: 0cm 5.4pt 0cm 5.4pt; mso-yfti-tbllook: 1184; width: 635px;">
<tbody><tr style="height: 18.75pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
<td colspan="3" nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 241pt;" valign="bottom" width="321">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">UTAS
BALANCE SHEET SUMMARY 2015 to 2022 $m<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 18.75pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 1;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 164.3pt;" valign="bottom" width="219"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 2;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 164.3pt;" valign="bottom" width="219"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2015<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2016<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2017<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2018<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2019<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2020<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2021<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2022<o:p></o:p></span></b></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 3;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 164.3pt;" valign="bottom" width="219">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Assets<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 4;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 164.3pt;" valign="bottom" width="219">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 11pt;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Cash<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">44.3 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">17.4 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">42.0 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">37.1 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">18.9 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">52.3 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">13.1 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">129.7 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 5;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 164.3pt;" valign="bottom" width="219">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 11pt;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Receivables & contract assets<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">31.3 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">33.2 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">32.6 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">35.3 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">40.6 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">45.1 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">68.2 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">73.7 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 6;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 164.3pt;" valign="bottom" width="219">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 11pt;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Investments<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">279.9 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">288.4 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">419.6 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">404.3 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">442.6 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">400.2 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">494.3 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">547.1 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 7;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 164.3pt;" valign="bottom" width="219">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 11pt;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">PPE/ PBSA<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">745.6 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">783.9 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">747.2 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">808.6 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">969.3 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">1,002.6 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">1,170.1 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">1,423.8 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 8;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 164.3pt;" valign="bottom" width="219">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 11pt;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Intangibles<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">47.8 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">49.6 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">51.0 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">51.2 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">52.7 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">47.4 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">42.7 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">55.4 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 9;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 164.3pt;" valign="bottom" width="219">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 11pt;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Other non fin assets<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">9.6 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">9.5 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">10.4 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">11.0 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">15.4 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">14.5 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">26.6 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">24.9 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 10;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 164.3pt;" valign="bottom" width="219">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Total
assets<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">1,158.5 <o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">1,182.0 <o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">1,302.9 <o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">1,347.4 <o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">1,539.5 <o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">1,562.2 <o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">1,815.0 <o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">2,254.5 <o:p></o:p></span></b></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 11;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 164.3pt;" valign="bottom" width="219"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 12;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 164.3pt;" valign="bottom" width="219">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Liabilities<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 13;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 164.3pt;" valign="bottom" width="219">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 11pt;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Payables<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">41.6 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">53.9 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">34.4 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">30.6 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">37.6 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">48.9 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">44.6 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">73.0 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 14;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 164.3pt;" valign="bottom" width="219">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 11pt;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Borrowings<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">118.6 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">103.1 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">93.6 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">93.6 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">209.6 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">135.3 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">82.9 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">360.0 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 15;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 164.3pt;" valign="bottom" width="219">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 11pt;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Provisions<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">79.3 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">87.8 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">89.9 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">87.4 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">94.2 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">94.1 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">101.1 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">104.3 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 16;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 164.3pt;" valign="bottom" width="219">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 11pt;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Contract liabilities<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">0.0 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">0.0 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">0.0 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">24.4 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">115.5 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">188.1 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">257.8 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">189.2 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 17;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 164.3pt;" valign="bottom" width="219">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 11pt;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Other liabs<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">19.1 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">25.6 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">172.7 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">140.0 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">124.5 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">119.5 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">186.1 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">174.9 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 18;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 164.3pt;" valign="bottom" width="219">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Total
liabilities<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">258.6 <o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">270.4 <o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">390.6 <o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">376.0 <o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">581.4 <o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">585.8 <o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">672.6 <o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">901.4 <o:p></o:p></span></b></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 19;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 164.3pt;" valign="bottom" width="219"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 20;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 164.3pt;" valign="bottom" width="219">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Net assets<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">899.8 <o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">911.6 <o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">912.3 <o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">971.4 <o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">958.1 <o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">976.3 <o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">1,142.4 <o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">1,353.2 <o:p></o:p></span></b></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 21;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 164.3pt;" valign="bottom" width="219"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 22;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 164.3pt;" valign="bottom" width="219">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Equity<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52"></td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51"></td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 23;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 164.3pt;" valign="bottom" width="219">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 11pt;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Statutory Funds<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">149.2 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">162.3 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">173.5 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">196.9 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">120.1 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">123.1 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">146.1 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">146.5 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 24;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 164.3pt;" valign="bottom" width="219">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 11pt;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Reserves<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">279.0 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">275.2 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">217.1 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">217.1 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">217.3 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">217.0 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">217.0 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">383.8 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 25;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 164.3pt;" valign="bottom" width="219">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; mso-char-indent-count: 1.0; text-indent: 11pt;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Retained earnings<o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">471.7 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">474.0 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">521.7 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">557.4 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">620.7 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">636.2 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">779.3 <o:p></o:p></span></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">822.8 <o:p></o:p></span></p>
</td>
</tr>
<tr style="height: 15pt; mso-yfti-irow: 26; mso-yfti-lastrow: yes;">
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 164.3pt;" valign="bottom" width="219">
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">Total
equity<o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">899.8 <o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38.35pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">911.6 <o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 40pt;" valign="bottom" width="53">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">912.3 <o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 41pt;" valign="bottom" width="55">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">971.4 <o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">958.1 <o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">976.3 <o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 39pt;" valign="bottom" width="52">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">1,142.4 <o:p></o:p></span></b></p>
</td>
<td nowrap="" style="height: 15pt; padding: 0cm 5.4pt; width: 38pt;" valign="bottom" width="51">
<p align="right" class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; text-align: right;"><b><span style="color: black; mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU; mso-font-kerning: 0pt; mso-hansi-font-family: Calibri; mso-ligatures: none;">1,353.2 <o:p></o:p></span></b></p>
</td>
</tr>
</tbody></table>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14pt; line-height: 107%;"><o:p> </o:p></span></p>
<div style="mso-element: footnote-list;"><!--[if !supportFootnotes]--><br clear="all" />
<hr align="left" size="1" width="33%" />
<!--[endif]-->
<div id="ftn1" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="file:///C:/Users/John%20&amp;%20Julie/Documents/JWL/UTAS%208%20year%20overview%20V2.docx#_ftnref1" name="_ftn1" style="mso-footnote-id: ftn1;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[1]</span></span><!--[endif]--></span></span></a>
This is what Moody’s told Green Bond investors when granting UTAS a credit
rating in Dec 2021.See <a href="https://theutaspapers.com/utas-green-bond-rating-raises-major-issues/"><span style="font-size: 11pt;">UTAS' Green Bond rating raises major issues - The UTAS
Papers</span></a><o:p></o:p></p>
</div>
<div id="ftn2" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="file:///C:/Users/John%20&amp;%20Julie/Documents/JWL/UTAS%208%20year%20overview%20V2.docx#_ftnref2" name="_ftn2" style="mso-footnote-id: ftn2;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[2]</span></span><!--[endif]--></span></span></a>
UTAS Annual Report 2022 page 34<o:p></o:p></p>
</div>
<div id="ftn3" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="file:///C:/Users/John%20&amp;%20Julie/Documents/JWL/UTAS%208%20year%20overview%20V2.docx#_ftnref3" name="_ftn3" style="mso-footnote-id: ftn3;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[3]</span></span><!--[endif]--></span></span></a>
Ibid page 24<o:p></o:p></p>
</div>
<div id="ftn4" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="file:///C:/Users/John%20&amp;%20Julie/Documents/JWL/UTAS%208%20year%20overview%20V2.docx#_ftnref4" name="_ftn4" style="mso-footnote-id: ftn4;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[4]</span></span><!--[endif]--></span></span></a><span style="mso-spacerun: yes;"> </span>See former Chancellor Michael Field’s opinion
piece in The Mercury accessed<span style="mso-spacerun: yes;"> </span>here <a href="https://www.saveutascampus.com/_files/ugd/54d3ee_48c62753505b4493a2520db051a03c5a.pdf">https://www.saveutascampus.com/_files/ugd/54d3ee_48c62753505b4493a2520db051a03c5a.pdf</a><o:p></o:p></p>
<p class="MsoFootnoteText"><o:p> </o:p></p>
</div>
<div id="ftn5" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="file:///C:/Users/John%20&amp;%20Julie/Documents/JWL/UTAS%208%20year%20overview%20V2.docx#_ftnref5" name="_ftn5" style="mso-footnote-id: ftn5;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[5]</span></span><!--[endif]--></span></span></a>
Ibid page 75<o:p></o:p></p>
</div>
<div id="ftn6" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="file:///C:/Users/John%20&amp;%20Julie/Documents/JWL/UTAS%208%20year%20overview%20V2.docx#_ftnref6" name="_ftn6" style="mso-footnote-id: ftn6;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[6]</span></span><!--[endif]--></span></span></a>
Ibid page 26<o:p></o:p></p>
</div>
<div id="ftn7" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="file:///C:/Users/John%20&amp;%20Julie/Documents/JWL/UTAS%208%20year%20overview%20V2.docx#_ftnref7" name="_ftn7" style="mso-footnote-id: ftn7;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[7]</span></span><!--[endif]--></span></span></a>
Ibid page 75<o:p></o:p></p>
</div>
<div id="ftn8" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="file:///C:/Users/John%20&amp;%20Julie/Documents/JWL/UTAS%208%20year%20overview%20V2.docx#_ftnref8" name="_ftn8" style="mso-footnote-id: ftn8;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[8]</span></span><!--[endif]--></span></span></a>
Ibid page 83.<o:p></o:p></p>
</div>
<div id="ftn9" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="file:///C:/Users/John%20&amp;%20Julie/Documents/JWL/UTAS%208%20year%20overview%20V2.docx#_ftnref9" name="_ftn9" style="mso-footnote-id: ftn9;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[9]</span></span><!--[endif]--></span></span></a> <a href="https://www.themercury.com.au/news/tasmania/university-of-tasmania-makes-call-on-city-move/news-story/489fb885cef187594a22736f3c47a478">University
of Tasmania commits to $600m move into Hobart CBD | The Mercury</a><o:p></o:p></p>
</div>
<div id="ftn10" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="file:///C:/Users/John%20&amp;%20Julie/Documents/JWL/UTAS%208%20year%20overview%20V2.docx#_ftnref10" name="_ftn10" style="mso-footnote-id: ftn10;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[10]</span></span><!--[endif]--></span></span></a>
Accessed via <a href="https://theutaspapers.com/wp-content/uploads/2023/01/Forestry-building-cost-blowout.pdf">Forestry-building-cost-blowout.pdf
(theutaspapers.com)</a><o:p></o:p></p>
</div>
<div id="ftn11" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="file:///C:/Users/John%20&amp;%20Julie/Documents/JWL/UTAS%208%20year%20overview%20V2.docx#_ftnref11" name="_ftn11" style="mso-footnote-id: ftn11;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[11]</span></span><!--[endif]--></span></span></a> <a href="https://www.parliament.tas.gov.au/__data/assets/pdf_file/0030/68970/LCS-UTAS-Inquiry-4-May-2023.pdf">Hansard
March 2021 (parliament.tas.gov.au)</a><o:p></o:p></p>
</div>
<div id="ftn12" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="file:///C:/Users/John%20&amp;%20Julie/Documents/JWL/UTAS%208%20year%20overview%20V2.docx#_ftnref12" name="_ftn12" style="mso-footnote-id: ftn12;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[12]</span></span><!--[endif]--></span></span></a>
Quoted here <a href="https://theutaspapers.com/utas-cbd-move-and-green-bond-mess-threaten-tasmanias-finances/">UTAS
CBD move and Green Bond mess threaten Tasmania's finances - The UTAS Papers</a><o:p></o:p></p>
</div>
<div id="ftn13" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="file:///C:/Users/John%20&amp;%20Julie/Documents/JWL/UTAS%208%20year%20overview%20V2.docx#_ftnref13" name="_ftn13" style="mso-footnote-id: ftn13;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[13]</span></span><!--[endif]--></span></span></a>
Moody’s have flagged this possibility . See<span style="font-size: 11pt;"> </span><a href="https://theutaspapers.com/utas-green-bond-rating-raises-major-issues/"><span style="font-size: 11pt;">UTAS' Green Bond rating raises major issues - The UTAS
Papers</span></a><o:p></o:p></p>
</div>
<div id="ftn14" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="file:///C:/Users/John%20&amp;%20Julie/Documents/JWL/UTAS%208%20year%20overview%20V2.docx#_ftnref14" name="_ftn14" style="mso-footnote-id: ftn14;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[14]</span></span><!--[endif]--></span></span></a>
The Profit and Loss statement (the Income Statement) each year includes a note
reconciling net profits with profits from core activities. The note has been
re-formatted to show the break-up of Net profits into the various components.<o:p></o:p></p>
</div>
<div id="ftn15" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="file:///C:/Users/John%20&amp;%20Julie/Documents/JWL/UTAS%208%20year%20overview%20V2.docx#_ftnref15" name="_ftn15" style="mso-footnote-id: ftn15;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span face=""Calibri",sans-serif" style="font-size: 10pt; line-height: 107%; mso-ansi-language: EN-AU; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[15]</span></span><!--[endif]--></span></span></a>
This is from the Note each year which is included in the financial statement as
Notes to the Statement of cash Flows (Note 29 in the 2022 Annual Report)<o:p></o:p></p>
</div>
</div>tasfintalkhttp://www.blogger.com/profile/04012719835733649162noreply@blogger.com0tag:blogger.com,1999:blog-4314112685994399920.post-67576417994802927302023-05-09T14:41:00.000+10:002023-07-09T16:58:33.343+10:00UTAS borrowings<p> </p><p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; mso-outline-level: 2;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">This is an additional submission to the Legislative Council’s Inquiry
into the Provisions of the University of Tasmania Act 1992 supplementing <span style="color: black;">submission # 93, evidence given on 12<sup>th</sup> December
2022 and a further submission made 19<sup>th</sup> December 2022.</span><o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The supplementary submission was prompted by
the lack of transparency and scrutiny surrounding UTAS’ borrowing arrangements
as it pushes on with its move into the centre of Hobart. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The discussion is widened to include the
raising of funds other than by traditional borrowings and whether Sec 7(2) of
UTAS’ governing Act which requires the Treasurer’s approval to borrow, needs to
be broadened to include other borrowing-like arrangements. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">This is followed by comments on other
arrangements that impact of UTAS’ financial position.<span></span></span></p><a name='more'></a><o:p></o:p><p></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The Auditor General looked at UTAS as part of
one his performance related audits <a href="https://www.audit.tas.gov.au/wp-content/uploads/Report-of-the-Auditor-General-No2-of-2019-20-UTAS-management-of-student-accommodation.pdf">HERE</a>.<span style="mso-spacerun: yes;"> </span></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The objective of this audit was to express an
opinion on the effectiveness of the University’s management of student
accommodation, not whether the arrangement was a defacto borrowing.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Nevertheless, it gives a good description of
the arrangement.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The following paragraphs in italics are cut
and pasted from the Auditor General’s Report.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><i><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">From May 2016, the student accommodation
strategy was influenced by the University’s appointment of a consultant to develop
a strategic capital management framework report and advise on a possible
student accommodation transaction to monetise the University’s PBSAs. This was
progressed further in September 2016 when the University Council approved the
strategy to pursue the monetisation of the University’s Purpose built student
accommodation (PBSAs).<o:p></o:p></span></i></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><i><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">In 2016, the University engaged a consultant
to assist it monetise its investment in 10 PBSA facilities located around the
State. At this time, both the Australian National University and the University
of Wollongong had entered into similar transactions. <o:p></o:p></span></i></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><i><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The University envisaged such a transaction
would:<o:p></o:p></span></i></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><i><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-spacerun: yes;"> </span>•
provide the University with an upfront payment from an investor<o:p></o:p></span></i></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><i><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-spacerun: yes;"> </span>•
transfer risk and responsibility to an investor <o:p></o:p></span></i></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><i><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">• provide the University with flexibility to
initiate future student accommodation developments <o:p></o:p></span></i></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><i><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">• achieve desired balance sheet gearing
outcomes <o:p></o:p></span></i></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><i><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">• fit with the University’s wider academic and
non-academic strategy<o:p></o:p></span></i></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><i><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Financial outcomes from the PBSA Agreement included:<o:p></o:p></span></i></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><i><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-spacerun: yes;"> </span>• an
amount of $132.6m received by the University from Spark Living Consortium on 5
September 2017 <o:p></o:p></span></i></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><i><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">• the payment of advisory costs associated
with the transaction of approximately $3.5m or 2.7% of transaction value<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></i></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><i><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">• the transfer of risk and financial
responsibility for capital expenditure and maintenance to Spark Living
Consortium for the 30-year term of the PBSA Agreement <o:p></o:p></span></i></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><i><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">• the introduction of a student rent mechanism
to ensure affordability and compliance with GST and NRAS obligations <o:p></o:p></span></i></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><i><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">• flexibility to build new PBSAs, with first
refusal rights provided to Spark Living Consortium <o:p></o:p></span></i></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><i><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">• the ability for Spark Living Consortium to
provide capital for new PBSA builds whilst retaining flexibility for University
to design and construct PBSA assets <o:p></o:p></span></i></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><i><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">• higher expenditure on asset services and
cleaning than previously spent by University and an average investment of $1.0m
each year for asset lifecycle works over 30 years <o:p></o:p></span></i></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><i><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">• the ability for the University to retain
funds owing to Spark Living Consortium if quality standards and University
condition grading requirements are not achieved<o:p></o:p></span></i></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The proceeds from Spark Living were added to
UTAS’ investment portfolio, presumably to be used to fund future capex.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">A further $70.8 million was received under the
same arrangements in February 2021. In that year most of the proceeds were
probably used to repay Tascorp’s borrowings as they reduced by $55 million
during the year as part of UTAS freeing itself from the pesky demands of
Tascorp (more on this below).<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The balance of the liability ‘Grant of right
to Operate ‘at 31<sup>st</sup> Dec 2021 was $180.3million.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Under the PBSA Agreement, the University
retained responsibility for collecting student accommodation rent. This is probably,
at least in part, because UTAS is a registered charity with the Australian
Charities and Not-for-profits Commission (ACNC) and charities who provide
accommodation at less than 75 per cent of market rates get special treatment
under the Goods and Services legislation allowing a refund of GST on rental
property expenses. Usually residential rents are input taxed, which means GST
isn’t chargeable, but nor is GST claimable on expenses incurred by residential
landlords. It is input taxed in other words. The special GST treatment extends
to claiming GST on new PBSAs, which means that eleven units can be built for
the price of ten. This is a huge bonus for UTAS.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Ordinarily a private company wouldn’t forward
sell rents for a lump sum in the way UTAS has (or monetise the value of the
PSBAs as financiers describe it) because the sale is in fact the sale of an
asset that is created at the time of sale with a near zero cost base. The new
asset is a right to operate PSBAs for a set term and receive the benefits of
the rents. It is not an ownership interest. Ownership remains with UTAS.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">In the case of the first tranche the cost base
is probably the $3.5 million in fees charged by the paper shufflers to set up
the deal. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Hence almost all the proceeds from the sale of
the newly created asset is likely to be a capital gain with a low cost base
which for a private company would be taxable at ordinary rates. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">But a tax-exempt body like UTAS doesn’t pay income
tax. That’s why it can structure a deal like this. Tax paying entities would
lose a large chunk of a lump sum payment which would dissuade them from
attempting a similar arrangement.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The matter of UTAS’s borrowing and the Sec
7(2) requirement was mentioned at hearings with UTAS on 1<sup>st</sup> March 2023
(pages 43 to 45 of the transcript). <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">It’s easy to argue as Prof Black did, that the
deal with Spark Living may have created a liability but that liability is not a
borrowing. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">But if one takes a see-through approach,
looking past the paperwork that support the deal, it is no different than a
borrowing. The balance sheet remains the same. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Most of the value of the PSBAs have been
transferred from Property Plant & Equipment to an account labelled Service
Concession Asset. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">And rather than having a liability termed
borrowing there is a liability termed Grant of right to Operate, which refers
to PSBAs managed by Spark Living. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">This is like a revenue in advance account. It
will reduce each year as rents are collected by UTAS and handed over to Spark
Living. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">For all intents and purposes, it’s little
different from a landowner collecting rents and then handing some over to a
bank to discharge borrowings used to finance the landowner’s investment.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">If it looks, walks and smells like a duck, then
it’s probably a duck.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">There’s no point in having an esoteric debate
of whether it’s a borrowing. The only relevant issue is what is the point of
Sec 7(2? If there is a need to seek the Treasurer’s permission before borrowing,
should the definition of borrowings be widened to include all borrowing-like
arrangements?<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">It’s reasonable to conclude that forward
selling rental income was part of a plan to accumulate funds by UTAS to pay for
the shift from Sandy Bay to Hobart Central. In that regards the outcome is
identical to UTAS borrowing money for that purpose.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">If the aim of Sec 7(2) is for the Treasurer of
the day to monitor and possibly veto such activities, then Sec 7 (2) needs to
be amended to include borrowing-like arrangements.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">On the matter of borrowings Prof Black said as
reported on page 44 of the transcript on 1<sup>st</sup> March 2023:<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><i><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">“……. the borrowing requires approval of the
Treasury, for the very good reason that our kind of balance sheet affects the
state's balance sheet. That makes a great deal of good sense given that would
be the case. That is why I am very comfortable that one explores where are the
appropriate boundaries and what are the appropriate mechanisms by which
decisions are of consequences to other parts get decided?”<o:p></o:p></span></i></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">It is not immediately clear what Prof Black
meant. UTAS’s balance sheet does not affect the state’s balance sheet.<span style="mso-spacerun: yes;"> </span>Although a public entity, it falls outside
the government sector for accounting purposes. It is not part of the General
Government sector, nor the wider Total State Sector which includes government
businesses as well as the General Government.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">If UTAS borrows from Tascorp, any borrowings
needed by Tascorp (a liability for the State) will be offset by a loan to UTAS
(an asset in the State’s books). The state’s balance sheet won’t be affected.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Nor will it be affected if UTAS borrows elsewhere
as it did when it borrowed from parties other than Tascorp in 2022 (more on
this below).<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">If Prof Black is indicating that he thinks it
makes a good deal of sense for UTAS to get approval from the Treasurer before borrowing,
then the Act needs to be amended to include all borrowing-like arrangements.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">UTAS’ fund raising to finance the re
development of the Sandy Bay campus and the move to Hobart has seen UTAS alter
its banking arrangements, moving away from Tascorp and organising a $50m
facility with one of the major banks and raising $350m via the so-called Green
Bond issue.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">It is not intended here to detail the move
from Tascorp except to say the RTI documents detailed </span><span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><a href="https://theutaspapers.com/green-bombshell-rti-documents-reveal-utas-broke-own-law/"><span style="font-size: 14.0pt; line-height: 150%;">here</span></a></span><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"> suggest the transition process resembled a
dog’s breakfast. It should have been a simple matter to seek and gain the
requisite approvals required by the Act. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">So what were the problems?<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The issues and the ensuing questions appear to
be:<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpFirst" style="line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">As Sec 7(2)
applies to all borrowings was timely approval given in all instances?<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-spacerun: yes;"> </span>If not, does the section need amending?<span style="mso-spacerun: yes;"> </span>Should thresholds be established which would
trigger a report to Parliament?<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">If approval was
granted for a ‘facility’ up to a certain amount was that approval used to raise
funds via a bond issue which capital market players don’t regard as a
‘facility’?<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">What are the
conditions that attach to the approval that covers current borrowings?<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">It appears clear
that UTAS was unhappy to surrender to Tascorp’s requirements for more security
feeling that it would be unnecessarily restrictive. Up till then Tascorp’s
facilities were largely unsecured and governed by a Master Loan Agreement which
appears to have required UTAS to always have cash and investments greater than
the facility (which it did).<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">As well as
additional security Tascorp would likely have required detailed business plans
and probable regular reporting. It is not certain whether Tascorp and Treasury
were given what they needed. <o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">If there is going
to be little or no scrutiny by the government are changes needed to enhance
UTAS’s reporting? There are any number of ways this can be done …. Via
regulations, Treasurer’s Instructions to name two. To whom should UTAS report?
To Members maybe if the Committee can identify who those Members should be?<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">How was UTAS able
to get a Moody’s rating the same as that of the State government, which applies
to Tascorp when it borrows on the market? Did Moody’s assume, and/or have they stated
or implied to bond investors that UTAS has an implicit guarantee from
government(s)? If so, is this correct? If not has UTAS or the government done
anything to correct the record? If there is a government guarantee, then this
would affect the State’s position. Perhaps this is what Prof Black had in mind
when he referred to UTAS’ borrowings affecting the State’s balance sheet? If
this is the case, then it needs to be clearly disclosed both in UTAS’
financials and the State’s statement of position outlined in the Treasurer’s
Annual Financial Reports.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpLast" style="line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">What has the
Auditor General (AG) had to say about Sec 7(2) and the transition from Tascorp
to other sources of funds? It would have formed part of his 2022 audit. He
audits compliance with the UTAS Act. His audit reports specifically confirm
this. AG also says he communicates with the UTAS Council if he finds problems<i>.</i>
There should be a good paper trail. There would be an engagement letter, an
audit plan, communications to and from parties if there were problems.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Responses to these issues will throw light on
how the current Act has operated and whether it needs amending.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">With UTAS pleading to be granted freedom to
operate effectively in today’s commercial world which confronts universities, it
is important to remember some of the arrangements which apply which gives it
advantages over others in that world. <o:p></o:p></span></p>
<p class="MsoListParagraphCxSpFirst" style="line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l1 level1 lfo2; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">It is a tax-exempt
entity. It doesn’t pay income tax on any of its activities including income
from investments.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpLast" style="line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l1 level1 lfo2; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">It, almost
certainly, receives special treatment under the GST Act allowing a refund of
GST incurred pursuant to the input-taxed provisions that relate to most
residential housing services.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Providing accommodation at below market rates
to students is not an act of generosity that comes at a cost to UTAS’ bottom
line. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Being income tax exempt and with special GST
treatment means UTAS’ students in low-cost accommodation are subsidised by
taxpayers not by UTAS. UTAS’ net returns would have been similar to private tax
paying landlords who charge market rents. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">UTAS may even have been better off, which
allowed it to sell off future rents to Spark Living who would be getting a market
acceptable rate of return which is likely to be greater than the rate of
interest that UTAS would have otherwise paid Tascorp. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Why ‘borrow’ from Spark Living if Tascorp’s
rate of interest on borrowings is less? To get away from Tascorp? How much, if
any, did UTAS sacrifice with the Spark Living deal rather than borrow from
Tascorp? <span style="mso-spacerun: yes;"> </span>How much did it ‘pay’ to remove
itself from Tascorp’s strictures? <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The AG performance audit noted UTAS had
managed to shift the risk for maintenance and capex to Spark Living over the
term of the deal. No mention was made about the risks on the revenue side. It
would be reasonable to assume they remain with UTAS with Spark Living receiving
a guaranteed revenue stream.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">It is not unreasonable to conclude that the
special arrangements that apply to UTAS have allowed it to escape from what
UTAS regarded as the yoke imposed by Tascorp. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">But in doing so it has further removed itself
from public scrutiny. Not only are there ill-defined ownership interests and
reporting lines but UTAS has managed to avoid any intrusions by Tascorp, an arm
of the government, by shifting its borrowings elsewhere. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">UTAS’ Moody’s rating suggests Green Bond
holders may believe UTAS is guaranteed by governments. This needs to be clarified.
Any such guarantee needs to be fully disclosed. Otherwise, we may find
ourselves in a moral hazard situation where a too-big-to-fail institution will
plough on with its plans to irrevocably alter the city centre of Hobart and
neighbouring Sandy Bay despite very little independent information on the
risks, cost and benefits, and <span style="mso-spacerun: yes;"> </span>the
conspicuous absence of a social licence.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">UTAS’ property developments have been enabled
by its huge cash flow advantages boosted from revenues in advance, not only
rents but grant income as well. The special provisions that apply to UTAS have
probably had benign effects in bygone days but are now used to leverage its
position unfairly. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The defence has always been that UTAS is a
public body acting in the best interests of the public as it sees them. This is
essentially what UTAS says. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">However, the evidence that UTAS has become a
law unto itself is more persuasive, with ill-defined ownership interests and
reporting lines, and the ability to largely determine who is appointed to
Council. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">However, planning to sell off public land
gifted to it so it can impose its largely undisclosed plans upon the majority
of Hobartians without adequate consultation is arguably a step too far.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The antiquated Act that governs UTAS’ affairs needs
updating. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><o:p> </o:p></span></p>tasfintalkhttp://www.blogger.com/profile/04012719835733649162noreply@blogger.com3tag:blogger.com,1999:blog-4314112685994399920.post-82418321466560088632023-05-09T14:12:00.001+10:002023-05-09T14:13:28.050+10:00UTAS: The need to redefine who are members<p> </p><p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; mso-outline-level: 2;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">This was an additional submission made on 19<sup>th</sup> December 2022 to
the Legislative Council’s Inquiry into the Provisions of the University of
Tasmania Act 1992, <span style="color: black;">supplementing submission #93 and
evidence given on 12<sup>th</sup> December 2022, all of which are available on the
committee’s <a href="https://www.parliament.tas.gov.au/ctee/council/LC%20Select%20-%20University%20of%20Tasmania.html">website</a>.<o:p></o:p></span></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; mso-outline-level: 2;"><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">The supplementary submission was prompted by the
lack of a coherent discussion as to who are UTAS’ members, to whom should UTAS
report and what role should members have in selecting board members (the University Council).<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; mso-outline-level: 2;"><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">The need for the exact legal status of UTAS to be
clarified was highlighted by Premier Rockcliff’s October 2022 assertion that
UTAS was a private company and Vice Chancellor Black’s recent contention at the
May 4<sup>th</sup> 2023 hearing that UTAS is an instrumentality of the State.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; mso-outline-level: 2;"><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">Hopefully the Committee will be able to address
this crucial issue. Most people are unaware if they're members of UTAS. Being a member does bestow any particular rights or obligations to receive information and very little by way a right to determine who should be elected to Council.<span></span></span></p><a name='more'></a><o:p></o:p><p></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm;"><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">Companies are by virtue of Corporation Law legal entities
with perpetual succession. <o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm;"><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">In the case of UTAS or GBEs or state
instrumentalities like TasTAFE and Stadiums Tasmania the corporate nature of
the entity is specified in their relevant governing acts.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">In the case of UTAS it is specified in Clause 4
of its governing Act.<o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; margin-left: 17.0pt; margin-right: 0cm; margin-top: 0cm; text-indent: -17.0pt;"><b><i><span style="color: black; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;"><span style="mso-spacerun: yes;"> </span>4.</span></i></b><i><span style="color: black; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;"> <b>Continuance and incorporation
of University</b><o:p></o:p></span></i></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; margin-left: 17.0pt; margin-right: 0cm; margin-top: 0cm;"><a name="GS4@Gs1@EN"></a><i><span style="color: black; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">(1) Notwithstanding the repeal by this Act of
the </span></i><span style="color: black; mso-color-alt: windowtext;"><a href="https://www.legislation.tas.gov.au/view/html/inforce/2022-12-13/act-9999-999"><i><span style="color: #0076bd; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">Amalgamation Act</span></i></a></span><i><span style="color: black; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;"> , the University continues in existence under
and subject to the provisions of this Act under the name </span></i><i><span style="color: #707070; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">"University of Tasmania"</span></i><i><span style="color: black; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">.<o:p></o:p></span></i></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; margin-left: 17.0pt; margin-right: 0cm; margin-top: 0cm;"><a name="GS4@Gs2@EN"></a><i><span style="color: black; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">(2) The University –<a name="GS4@Gs2@Hpa@EN"></a><o:p></o:p></span></i></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; margin-left: 53.0pt; margin-right: 0cm; margin-top: 0cm;"><i><span style="color: black; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">(a) has perpetual succession and a seal; and<o:p></o:p></span></i></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; margin-left: 53.0pt; margin-right: 0cm; margin-top: 0cm;"><a name="GS4@Gs2@Hpb@EN"></a><i><span style="color: black; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">(b) may sue and be sued in its corporate name.<o:p></o:p></span></i></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; margin-left: 17.0pt; margin-right: 0cm; margin-top: 0cm;"><a name="GS4@Gs3@EN"></a><i><span style="color: black; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">(3) The seal is to be kept and used only as
authorized by the Council.<o:p></o:p></span></i></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; margin-left: 17.0pt; margin-right: 0cm; margin-top: 0cm;"><a name="GS4@Gs4@EN"></a><i><span style="color: black; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">(4) All courts and persons acting judicially
must take judicial notice of the imprint of the seal on a document and presume
that it was duly sealed by the University.<o:p></o:p></span></i></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; margin-left: 17.0pt; margin-right: 0cm; margin-top: 0cm;"><a name="GS4@Gs5@EN"></a><i><span style="color: black; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">(5) For the avoidance of doubt, the
University is taken to have continued in existence under the name </span></i><i><span style="color: #707070; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">"University of Tasmania"</span></i><i><span style="color: black; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;"> since its establishment in 1890</span></i><i><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">.<o:p></o:p></span></i></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm;"><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">With GBEs Clause 6 of the GBE Act is the relevant
provision: <o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; margin-left: 17.0pt; margin-right: 0cm; margin-top: 0cm; text-indent: -17.0pt;"><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;"><span style="mso-spacerun: yes;"> </span> </span><b><i><span style="color: black; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">6. Legal entity of Government Business Enterprise</span></i></b><i><span style="color: black; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;"><o:p></o:p></span></i></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; margin-left: 17.0pt; margin-right: 0cm; margin-top: 0cm;"><i><span style="color: black; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">A Government Business Enterprise –<o:p></o:p></span></i></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; margin-left: 17.0pt; margin-right: 0cm; margin-top: 0cm;"><i><span style="color: black; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">(a) is a body corporate with perpetual succession;
and<o:p></o:p></span></i></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; margin-left: 17.0pt; margin-right: 0cm; margin-top: 0cm;"><i><span style="color: black; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">(b) has a seal; and<o:p></o:p></span></i></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; margin-left: 17.0pt; margin-right: 0cm; margin-top: 0cm;"><i><span style="color: black; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">(c) may sue and be sued in its corporate name.<o:p></o:p></span></i></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm;"><span style="color: black; font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">TasTAFE and Stadiums Tas have a similar clause in
their acts as follows:<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><b><i><span style="font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-spacerun: yes;">
</span>Homes Tasmania (and TasTAFE}<o:p></o:p></span></i></b></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; margin-left: 36.0pt; margin-right: 0cm; margin-top: 0cm;"><i><span style="font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-spacerun: yes;"> </span>(a) is a body corporate with perpetual
succession; and <o:p></o:p></span></i></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; margin-left: 36.0pt; margin-right: 0cm; margin-top: 0cm;"><i><span style="font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">(b)
may have a seal; and<o:p></o:p></span></i></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; margin-left: 36.0pt; margin-right: 0cm; margin-top: 0cm;"><i><span style="font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-spacerun: yes;"> </span>(c) may sue and be sued in its corporate name;
and <o:p></o:p></span></i></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm; margin-left: 36.0pt; margin-right: 0cm; margin-top: 0cm;"><i><span style="font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">(d)
is an instrumentality of the Crown<o:p></o:p></span></i></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">As can be seen Homes Tasmania and TasTAFE have
an additional sub-section specifying they are public instrumentalities unlike
GBEs and UTAS. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">GBEs and State instrumentalities don’t have
members. They are entities owned by the Crown.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">UTAS’ members are defined by Section 5:<o:p></o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; margin-left: 17.0pt; margin-right: 0cm; margin-top: 0cm; text-indent: -17.0pt;"><b><i><span style="color: black; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;"><span style="mso-spacerun: yes;"> </span>5. Constitution
of the University</span></i></b><i><span style="color: black; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;"><o:p></o:p></span></i></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; margin-left: 17.0pt; margin-right: 0cm; margin-top: 0cm;"><a name="GS5@Gs1@EN"></a><i><span style="color: black; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">(1) The University consists of –<a name="GS5@Gs1@Hpa@EN"></a><o:p></o:p></span></i></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; margin-left: 53.0pt; margin-right: 0cm; margin-top: 0cm;"><i><span style="color: black; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">(a) the members of the Council; and<o:p></o:p></span></i></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; margin-left: 53.0pt; margin-right: 0cm; margin-top: 0cm;"><a name="GS5@Gs1@Hpb@EN"></a><i><span style="color: black; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">(b) the members of the academic staff; and<o:p></o:p></span></i></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; margin-left: 53.0pt; margin-right: 0cm; margin-top: 0cm;"><a name="GS5@Gs1@Hpc@EN"></a><i><span style="color: black; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">(c) . . . . . . . . <o:p></o:p></span></i></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; margin-left: 53.0pt; margin-right: 0cm; margin-top: 0cm;"><a name="GS5@Gs1@Hpd@EN"></a><i><span style="color: black; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">(d) the members of the professional staff; and<o:p></o:p></span></i></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; margin-left: 53.0pt; margin-right: 0cm; margin-top: 0cm;"><a name="GS5@Gs1@Hpe@EN"></a><i><span style="color: black; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">(e) the graduates; and<o:p></o:p></span></i></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; margin-left: 53.0pt; margin-right: 0cm; margin-top: 0cm;"><a name="GS5@Gs1@Hpf@EN"></a><i><span style="color: black; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">(f) the students.<o:p></o:p></span></i></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; margin-left: 17.0pt; margin-right: 0cm; margin-top: 0cm;"><a name="GS5@Gs2@EN"></a><i><span style="color: black; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">(2) Notwithstanding </span></i><span style="color: black; mso-color-alt: windowtext;"><a href="https://www.legislation.tas.gov.au/view/whole/html/inforce/current/act-1992-051#GS5@Gs1@EN"><i><span style="color: #0076bd; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">subsection (1)</span></i></a></span><i><span style="color: black; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;"> , a person referred to in that subsection may
make a statutory declaration that he or she has a conscientious objection to
being a member of the University and, on giving the declaration to the
Vice-Chancellor, he or she ceases to be a member of the University.<o:p></o:p></span></i></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; margin-left: 17.0pt; margin-right: 0cm; margin-top: 0cm;"><a name="GS5@Gs3@EN"></a><i><span style="color: black; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">(3) A person who makes a declaration
under </span></i><span style="color: black; mso-color-alt: windowtext;"><a href="https://www.legislation.tas.gov.au/view/whole/html/inforce/current/act-1992-051#GS5@Gs2@EN"><i><span style="color: #0076bd; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">subsection (2)</span></i></a></span><i><span style="color: black; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;"> does not, by that declaration, prejudice any
other position or status which that person holds or enjoys –<a name="GS5@Gs3@Hpa@EN"></a><o:p></o:p></span></i></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; margin-left: 53.0pt; margin-right: 0cm; margin-top: 0cm;"><i><span style="color: black; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">(a) by virtue of his or her employment at, or participation
in the affairs of, the University; or<o:p></o:p></span></i></p>
<p class="MsoNormal" style="background: white; line-height: 150%; margin-bottom: 0cm; margin-left: 53.0pt; margin-right: 0cm; margin-top: 0cm;"><a name="GS5@Gs3@Hpb@EN"></a><i><span style="color: black; font-size: 12.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;">(b) as a student or graduate of the University.<o:p></o:p></span></i></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Only certain persons are included as members. Were
it not for this clause UTAS would likely be included as a State-owned entity
and included in the Total State Sector.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">UTAS therefore falls into the 4<sup>th</sup>
tier of government …. public institutions n.f.d. (= not further defined). <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The reasons for raising the issue of the
structure and who are the members are twofold.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpFirst" style="line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">1.<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Most people believe UTAS is a public
institution that belongs to them. From a strict legal point of view that may
not currently be the case. Sec 5 has a much narrower definition of member. UTAS
may have grounds to ignore what the public think about them because they don’t
have a direct interest as members. Maybe the public have an indirect interest
via one of UTAS’ prescribed function in Sec 6 (g)? viz</span><i><span style="background: white; color: black; font-size: 12.5pt; line-height: 150%;"> ”to
engage in activities which promote the social, cultural and economic welfare of
the community and to make available for those purposes the resources of the
University.”</span></i><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><o:p></o:p></span></p>
<p class="MsoListParagraphCxSpLast" style="line-height: 150%; margin-bottom: 0cm; mso-add-space: auto; mso-list: l0 level1 lfo1; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">2.<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="background: white; color: black; font-size: 14.0pt; line-height: 150%;">To
establish a reporting path – who reports to who.</span><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Most current members are either staff, alumni
or students. Most of the latter would be unaware of their membership status. In
any event reporting to members is more honoured in the breach than in the
observance. Parliament is the default receiver of the annual report but that’s
a perfunctory exercise.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">There is a need to decide whether the broader
public have an interest in UTAS that would then require reporting to them as
members. If they were the only members, UTAS would probably be seen to be part
of the Total State Sector. To mandate that would serve little purpose, quite
apart from making accounting for the Total State Sector far more complicated.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">This establishes the rationale for a wider
definition of member – to codify the public’s interest in UTAS as members
alongside other members, the staff, alumni, and students say, who should
comprise the ownership group to whom reports from Board/Council would be
presented.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">A State-Owned Corporation SOC is a company
that is majority owned and controlled by the State government. It’s not
intended that the government should own or control UTAS, rather the members
would via say a separate company which was termed a State Owned Corporation SOC
but more correctly is a Publicly Owned Corporation, which like a SOC, is administered
under the auspices of the Corporations Law, but is not wholly owned and
controlled by the government.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">UTAS is a long-standing public institution
which is often now described as a business. The Government Business Enterprises
Act 1995 was used for a while to provide a statutory framework to run
government business. Many of the provisions contained therein are like those in
the Corporations Law which lays out the rules for the conduct of companies. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The GBE Act is no longer used. There was no
point when a more flexible arrangement could be achieved with an off the shelf
corporation together with an accompanying portfolio act, administered under
Corporations Law.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">It was for this reason that a publicly owned
company to help run UTAS was suggested. It could be set up with members as
agreed who in turn would elect/appoint board members as laid out in the portfolio
Act, from the community, staff, alumni and current students as deemed optimal.
These board members would constitute the members of Council, supplemented by
the Chancellor and Vice Chancellor who could still be appointed as provided by
the current Sections 14 and 16.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">A company provides more flexibility than
corporate entities whose structure is set out in a government statute,
especially when shareholder agreements, which may set out matters not covered
in statutes are also part of the landscape. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">It is not unusual for unrelated parties to run
a business as a Joint Venture through a corporate structure but with a
shareholder agreement on the side which covers off on more detailed matters and
which can be changed with a revised agreement. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">In this instance being able to change
governance procedures by agreement between parties, provided there were
sufficient safeguards, is preferrable to a system which allows one party to
hijack control leaving the tortuous process of changing a governing Act as the
only solution to what may be an existential crisis.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The aim is not to engineer a takeover of UTAS
by the government, rather to establish a structure with members who better
reflect the interests that various parties have in an entity like UTAS, and set
up reporting lines where reports with the required information are given at the
required time to members, who in turn can provide feedback, or as in the case
of companies, exercise a choice as to who is elected to the Board <span style="mso-spacerun: yes;"> </span>of Public Co and hence the Council of UTAS.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">The above is the rationale for replacing the
current Sec 5 with an updated definition of who are the members of UTAS and update
Section 8 to specify the Council comprises the Chancellor, the Vice-Chancellor
and the directors of Public Co elected as set out in Public Co’s portfolio Act
by members as defined by Sec 5.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Updating Sections 5 and 8 are the most
important governance changes needed together with revised reporting procedures
of who reports to whom, when and what. The latter could be included in the portfolio
act and/or a shareholder’s agreement. <o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">Reports should make it clear how each of the
functions of the university as detailed in Section 6 were addressed during the
reporting period with financial information as well as supporting quantity
information.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: 150%; margin-bottom: 0cm;"><span style="font-size: 14.0pt; line-height: 150%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">There has been a notable absence of support
for UTAS’ current governance model where the Council itself has such a huge say
in future Council member selection. Hence a three-way split between the
academic staff, alumni and current students, and the community might be a
reasonable starting point for revising Council composition, with elections
being the preferred way of choosing members, or in the case of community members,
an arm’s length non-partisan arrangement to appoint the best available to fill
any missing skill/knowledge gaps.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size: 14.0pt; line-height: 107%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="background: white; line-height: normal; margin-bottom: 6.0pt;"><span style="color: black; font-size: 14.0pt; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-AU;"><o:p> </o:p></span></p>tasfintalkhttp://www.blogger.com/profile/04012719835733649162noreply@blogger.com0