Friday, 20 April 2018

The case for Basslink?

(Published in The Mercury on 20th April 2018. This blog includes additional endnotes.)
With all the talk about a second Basslink one would have expected to have a clear picture of the costs and benefits of the first interconnector. Surely if you’re buying another of the same, one of the determining factors would be how the first has performed? Has it worked as planned?

The short answer is no. It’s been a costly voyage into the unknown.

Thursday, 29 March 2018

Forestry Tasmania and the RFA


The following was a background paper prepared as part of a series of articles on Regional Forest Agreements  by Gregg Borschmann published by The Guardian. An overview can be found  HERE.
The Guardian asked the Tasmanian minister responsible for forestry a series of questions about the RFA. The questions and the Minister's responses are included at the end of this blog.

The Tasmanian Regional Forest Agreement (RFA) signed in 1997, was supposed to provide a framework for the sustainable management of Tasmania’s forests.

If financial sustainability was the aim, the outcome has been a complete failure. Since 1997 the state-owned Forestry Tasmania (FT) has suffered cash operating losses of $94 million. In simple terms it was selling timber far too cheaply.

But the overall picture is even worse. Capital spending of $368 million on plant and equipment, roads and plantations, most sourced from government funds, failed to add anything to FT’s asset base.  FT’s total operating cash loss over 20 years was therefore $454 million.

That’s just the cash losses.

Not only did new capital spending fail to increase FT’s asset base, there were huge non-cash losses as forests under its trusteeship lost $750 million or 90 per cent of their value.

Thursday, 1 March 2018

A surplus of lies


Treasurer Gutwein reckons even after factoring in all the promises made during the election campaign there will still be surplus totalling $104 million over the next four years.

"The key thing here is that we have arrived at a modest surplus to provide for a buffer moving forward," he was reported as saying.

Mr Gutwein forgot to mention the skinny surplus each year is solely because of the $40 million special dividend received annually from TTLine.

As explained in the last blog profits don’t imply cash surpluses. Now we have Mr Gutwein trying to tell us there is still a buffer when the tiny profits which he calls surpluses  are due entirely to transfers that are locked away and can only be used to fund vessel replacements.

Take away the TTLine transfers and even the paper profits disappear.

Saturday, 24 February 2018

Back in black?



One of the Hodgman government’s claim that always seems to pass without challenge is the proposition that the budget, being back in black is now able to withstand more spending.

The almost universal view is that we now have the necessary cash buffer to be able to loosen the purse strings a little and give ourselves a treat after a few years of austerity.

However, reality has a different perspective.

Wednesday, 21 February 2018

RSL pokie porkies

The release of player loss figures for each individual pokie venue casts a huge pall of doubt over the claims by the Glenorchy RSL that removal of pokies will be the swan song for the Club and the end of life as we know it.

The Club’s haul for the 2015/16 year, the total of player losses, was $590,000. This is only a fraction of the $4.5 million lost at the Mecca of misery, the Elwick Hotel just up the road with the same number of machines.

But with losses of about $20,000 per pokie there’s no money being made by the Club. Anyone familiar with the industry knows that when player losses slip below $20,000 per pokie it’s time to summon the pokie machine undertaker.

Tuesday, 20 February 2018

Election odds


The absence of any reliable polling during the current election campaign has left most observers scratching their heads as to what is exactly happening in the minds of voters.

What are the betting markets saying?

Saturday, 10 February 2018

Liberal pokie gifts


Andrew Wilkie in his latest media release reckons the Federal Group is “set to pocket an enormous $18 million windfall if the Liberals win government.”

Nonsense.

The figure is $75 million.

There’s obviously a bit of misunderstanding about how the Libs’ pokie industry welfare policy works. The value of pubs and clubs with pokies will receive a boost with increased pokie commission. If the venues are given licenses for a set period, then the amount of those future commissions will reflect in enhanced capital values of venues. If the licenses are in perpetuity, then the value of pubs and clubs with pokies will increase by $250 million.