As promised, the Hodgman Liberal Government has stopped the support to Forestry Tasmania from the Budget and it will not receive one red cent from the Consolidated Fund for its commercial operations.
As we’ve said previously, a one-off, $30 million equity transfer from TasNetworks will be provided at the start of the next financial year to put Forestry Tasmania onto a pathway to long-term sustainability.
Forestry Tasmania flagged last year that it may require access to additional working capital of $10 million through Tascorp to account for timing of cash flows and as a result I increased the letter of comfort held by Tascorp earlier this year to $41 million. It should be noted that Forestry Tasmania’s current borrowings are $27.8 million.
There will be no additional transfers or money from the Budget for Forestry Tasmania’s commercial operations and borrowings in future will be met by the sale of the hardwood plantations.