Our taxes wasted on logging industry payouts

Tuesday, January 10, 2012

This one is a ripper if you take a moment to read it.

Andrew Darby, an Age journo based in Hobart, revealed in early January that the $45 million of our taxes about to be handed to Tasmanian loggers could be money down the drain.

One exit program of the Howard era was supposed to ease loggers into new jobs or help make the industry slow down and change its ways. But when expensive new equipment was bought with the dosh, it was followed by a more costly exit package for those same logging businesses in the next handout package (to compensate for the value of their new equipment).

Greens senator Christine Milne is looking into this through a Senate committee. Ernst & Young investigated the $54 million Howard government program. It handed out 108 grants, from $6,000 to $10.5 million, mainly to upgrade and buy new logging gear.

The federal Auditor-General had Ernst & Young investigate this in 2010.

Their study said that, in 60 cases, the govt department could not find the loggers income and expenditure statements to support their applications. That means there was no proof that the loggers actually needed our money. In 29 cases, money was handed over before funding deed requirements were met. In 26 cases, either there was no confirmation the claim was for an approved purchase, they were given more money than agreed, or there was no tax invoice on file.

After that mess, Tasmania’s logging industry again went downhill. Another $17 million of our taxes was then given by the Labor government in another program in late 2010.

Looking at the two programs, it shows that at least five logging contractors scored up to $410,000 for new logging machines in the first round, then were later given up to $825,000 to leave the Tasmanian industry in 2010-11. They were given huge sums of money to stay, followed by even more to go!

The list goes on - $175,000 for a mill that was never built, $1.48 million for installing plant and equipment at Wesley Vale that was shut down soon after.

A fraud investigation into the 2010-11 program was carried out by the Federal Department, but of course didn’t refer any matters to the police. Now the Gillard govt is considering applications for the third, $45 million, tranche of aid to the Tassie loggers!

Of the 98 applications, about 75% don’t give enough information to make a decent assessment. Senator Milne is demanding a legal process and independent assessments.

Read The SMH article

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