MyEnvironment Inc / Opinion / A quick look at a mounting debt

A quick look at a mounting debt

Steve Meacher

For the fifth year running, the state government's native forest logging arm, VicForests, has failed to return a dividend to the people of Victoria. This dividend is the sum the business is supposed to pay the state for the privilege of being allowed to log in publicly-owned forests.

The latest failure to pay a dividend is revealed in VicForests' 2012 Annual Report, tabled in Parliament last week. Each year the amount to be paid is determined "after consultation with the Treasurer" and for the last five years it has been assessed at "$Nil". Dividends have been paid in only two years out of eight since the corporation split from the DSE in 2004. In the 2011 Report it was "proposed to pay a dividend of $1,260,000 in October 2011," but this remains unpaid. VicForests are a slush fund for Nippon owned Reflex copy paper and the work for the dole loggers. Cheaper to send them to Bali to retire that continue this outrageous program whilst our are forced to TAFEs close. Where is Ms Fyffe of this?

Read more

Steve Meacher

For the fifth year running, the state government's native forest logging arm, VicForests, has failed to return a dividend to the people of Victoria. This dividend is the sum the business is supposed to pay the state for the privilege of being allowed to log in publicly-owned forests.

The latest failure to pay a dividend is revealed in VicForests' 2012 Annual Report, tabled in Parliament last week. Each year the amount to be paid is determined "after consultation with the Treasurer" and for the last five years it has been assessed at "$Nil". Dividends have been paid in only two years out of eight since the corporation split from the DSE in 2004. In the 2011 Report it was "proposed to pay a dividend of $1,260,000 in October 2011," but this remains unpaid. VicForests are a slush fund for Nippon owned Reflex copy paper and the work for the dole loggers. Cheaper to send them to Bali to retire that continue this outrageous program whilst our are forced to TAFEs close. Where is Ms Fyffe of this?

In a review of VicForests' performance prepared for Treasury in 2010, URS Australia p/l suggested that the company should be able to produce 15% - 20% Return on Equity. On this basis a group of local residents and conservationists has calculated the outstanding amount after 8 years of operation to be more than $42 million (at 15% RoE).

In spite of being allowed free access to 'harvest' public assets, VicForests has so mismanaged its affairs that it has made an operational loss of $96,000 this year. And what has happened to a promised $6.3 million that was meant to be repaid to their loan? It appears to have vanished from the books.

If the unpaid dividends are calculated at the higher rate of 20%, the amount VicForest owe us exceeds $60 million.

Since it commenced operations in August 2004, VicForests has made profits totalling a little over $11 million and over the same period has received grants from the state government in excess of $24 million. VicForests are unnofficially insolvent and only continues trading because it has been made exempt from Part IV of the Trade Practices Act until 2015. A luxury Gunns and other legitimate companies could not afford.