Wednesday 11 July 2018
Hansard of the Legislative Council


Resources Policy and Regulatory Services

4.1  Forestry Policy and Reform -

Mr FINCH - Under this item there is an allocation of $12 million for some CSO compliance in the area of resources.  It became confused because we moved into the realm of Sustainable Timber Tasmania and we were told this would need to be requested by the minister through Sustainable Timber Tasmania.  We had the minister sitting in our briefing and we had this request for information about $12 million in this area of policy and reform.  I would like some detail on how it is expended.  Could I have a breakdown of how this $12 million is being utilised for this CSO obligation?  I have been through the Hansard and we were given generalisations - it is for roads and it is for this and that. 

I left it open because I was not satisfied and I wanted more detail.  A $15 a hectare allocation was made by the department for this CSO obligation.  That is fine, but I want to know some details of how that $12 million is being spent.  I requested a breakdown of the programs funded through a CSO payment of $12 million, noting this will need to be requested by the minister through Sustainable Timber Tasmania.  It is a general question.  I am curious because that is our job.

I would have thought there might be some focus on that.  I was after some detail, a breakdown of the programs, but what did I get back?  The answer was -

Sustainable Timber Tasmania manages Permanent Timber Production Zone land and ensures it remains accessible and available for multiple uses. 

That is good -

The activities supported through the CSO payment of $12 million include:

  • maintenance of the forestry road network to allow for continued community, tourism and firefighting access;
  • management of public recreation sites;
  • provision of forest education activities; and
  • Special Species timber management and ongoing facilitation of forestry research.

That does not approximate to what I am after.  I want to know about the maintenance of the forestry road network to allow continued community, tourism and blah blah.  I want to know the detail of how much was spent on that out of that $12 million.

Managing public recreation sites - how much was being used for that particular area of activity?  Forest education activities - how much was used to provide that service to the operation?  The same with special species timber management.

I am being duckshoved in respect of a request I am making out of genuine curiosity.  There is no plan here, no track.  I am not waiting to catch somebody out.  I want the information that should have been forthcoming during the budget Estimates process.

If it is not available on the day, I can understand that - not all the information is available on the day - but with the request made, I would have thought giving me more detail would have been focused on by the minister and the people in his department.

Mrs HISCUTT - I am advised that the pattern of expenditure varies from year to year.  Based on last year, for example, the Mersey Forest Road was a washout.  That put the price up.

Treasury does not hand this money out willy-nilly as you could imagine.  The $12 million in the forward Estimates is what may be anticipated to be used for some of these things.  That may change or you may see a request for additional funds - RAF - come through if there is a washout or some other disaster.  It was hard to put actual detail on where that money will be spent because it has not been spent yet.

Mr FINCH - Do we have any details about what was spent in the previous year or is that not applicable to this particular budget Estimates program?

It was interesting, going back through the Hansard, Mr Evans, in a reply to me, said -

No, it can't be broken down.  The use of that CSO is implemented through CSO direction issued to the corporation by the ministers.

You could inquire about how that CSO is applied through GBE scrutiny, but we don't hold that level of detail.  That level of detail is an operational matter held by STT.  I am sure that they would be able to provide that detail in the GBE scrutiny committee but we don't have access to it.

Why would we not have access to that during the budget Estimates scrutiny?  Why would that level of detail not be available to us, if in fact the CSO was used over the previous 12 months?

Mrs HISCUTT - So we could inquire about the previous year.

Mr FINCH - How did the previous 12 months stack up?  I understand we may not have details about how it will be spent or suggested to be spent this year, but what was the CSO spent on in the previous 12 months?

Mrs HISCUTT - I am assured that is a question to be raised at GBE scrutiny committees.  Your other alternative is to put it as a question without notice.

Mr Finch - Duckshoving.

Ms FORREST - I want to follow up on the point raised by the member for Rosevears.  I pointed out to the minister during Estimates that there was a descriptive note on page 324 of budget paper 2 on this, which he basically spouted back to me in his answer.  He just repeated what was already noted in the budget papers - there it was.  We asked for a breakdown of how much is allocated from that $12 million to each of those output groups, as the member for Rosevears alluded to.  As the member for Rosevears read out, he said that Mr Evans had said that it cannot be broken down, but then he went onto say, as the member for Rosevears quoted, that use of that CSO is implemented through a CSO direction issued to the corporation by the ministers.  What is the direction issued to the corporation?

The minister is in front of us.  The minister issues the direction; the direction is $12 million of CSO funding to fund forestry road networks to allow for, as the budget papers say -

continued community, tourism and firefighting access; management of public recreation sites; provision of forest education activities; and special species timber management and ongoing facilitation of forest research. 

There is a direction issued, so surely the minister would know what direction he has issued, or does he not know this either?

Mrs HISCUTT -We have a copy of the ministerial direction for government business enterprises, which sets out how the money should be spent.  It does not include figures.  There may be an update but it is unlikely.  I seek leave to table this document for the use of members and to have it incorporated in the Hansard.

Leave granted.

Mr FINCH - Leader, thank you for the information, which will help to unravel this.  It is part of the way, but it is not what I was seeking.  My comment about duckshoving is not directed at the officers now at the table, it is about the system not allowing me to make what I thought was a budgetary request about how that money is being spent. Had it not been planned for in the Estimates Committee A meeting, I would not have expected those figures to be forthcoming.  Since the request went in separately, I thought some effort would be made to provide me with that information in the spirit of transparency. 

What is the issue with revealing how that money is going to be spent and the quantum?  I said in the meeting that I was likely to ask these questions during budget Estimates and at the GBEs. 

Ms Forrest - Hopefully we will have STT in front of Estimates Committee A this year.  I have already made that request. 

Mr FINCH - I did not want to cast aspersions on the members here; it was about the system not being transparent and giving the full information.  It did not need to be that full; it needed to be some idea of where that money was going.

Mrs HISCUTT - I am sure no offence was taken by anyone here.  We understand your frustrations.  The ministerial direction that was tabled would have been tabled ahead of GBEs anyway, so if you were to get that and then ask the specific questions, you should have a better result.

Ms FORREST - Following on from that point before I go to my next point, GBEs are only fronting up every second year to the Legislative Council and we do not know who is going to be scrutinising whom at this stage.  I made the request that Estimates Committee A, being the resource committee, would have Sustainable Timber Tasmania - STT - this year.

The member for Rosevears has made a relevant point and asked a relevant question because it was not that long ago the CSO was removed altogether.  Those who have been here for a while will remember the whole sorry saga about the former Forestry Tasmania having to fund all these activities out of its own operating budget.  That was part of the reason for its decline and the real financial challenges it found itself facing.  That was a decision of government, but FT could have gone back and asked for it but it did not.  That was part of a government administration committee A inquiry a few years ago.

I also believe that previously the CSO had been around the level of $7 million so it is a relevant question as to what is being spent where.  It is helpful for the people of Tasmania to understand how many millions of dollars are spent on upgrading their picnic areas, and how much is being spent maintaining those roads so that we can access those areas to fight fires when we need to.  It is not information we are seeking because we want to get some numbers - it is because it helps us to communicate with our constituents about why this money is being paid to Sustainable Timber Tasmania to undertake a role that is important.

The Government clearly stated it is not using taxpayers' money to prop up STT anymore, but if we cannot get the information that shows how the money is being used, I can understand that criticism being made.

Mrs Hiscutt - Point taken.

Ms FORREST - The other questions asked of the minister in this output group related to the value of the trees.  I asked about the current value of the biological asset which is the trees - it is the only biological asset we own - so the figure reflects that:  the breakdown of the $93.4 million biological assets between plantation and native assets and the breakdown of the percentage of the entire biological asset between native and plantation resources and why there has been a substantial drop between the 2018 budget figure of $201 million and the estimated outcome of $93.4 million for the asset.

The answers that came back - and I am reading these in because this is the way it was responded to, Madam Deputy Chair.  This is the answer that was provided -

The current value is $93.4 million -

which we know -

which is the estimate by Sustainable Timber Tasmania of the value of the biological assets for the purposes of the State Budget.  It takes into consideration the independent valuation of the forest estate as at 30 June 2017 and the financial impact of the subsequent hardwood plantation sale.  The next independent valuation of the forest estate will be undertaken in the near future to determine the value as at 30 June 2018. 

The forest estate is valued as a whole incorporating land and roads.  There is no split made between the value of plantation forest assets and native forest assets.

I found this interesting, Madam Deputy Chair.  I thought there would have been a split.  I am not sure whether they use the same discount factor or what, but it is surprising we do not have a split between our native forest assets and our plantation assets.  Maybe, again, it is a question we can ask of STT at a later time.

The answer goes on -

The reduction in the estimate provided for the 2017-18 State Budget and the estimate provided for the 2018-19 State Budget is due to a combination of the decrease in value of the forest estate recognised as at 30 June 2017 (due to changes in assumptions for rate of harvest, plantation growth rates and earnings of southern pulpwood) and the hardwood plantation sale.

That answer was in the letter from the minister, which is not dated, but it was late after we requested it.  I asked:  what was the value of the hardwood plantations as at 30 June 2017, including the biological assets of $201 million, and subsequently sold during the 2017-18 year?

Mrs HISCUTT - It appears no presale valuation was done.  It was put on the open market and advertised internationally.  It was eventually sold for a price of $60.7 million.

Item agreed to.