VicForests’ dividend – the truth!
Opening VicForests 2014 – 2015 Annual Report, the corporation’s chairman, Gordon Davies, makes the proud assertion that “These results have enabled us to pay increasing dividends to the Government, providing a financial return to the people of Victoria in addition to all of the social benefits the native timber industry provides”. This is reinforced by a similar claim in the CEO’s Report, “Our ongoing positive financial position has enabled us to pay dividends to our shareholder, the Treasurer – $250,000 based on the 2012-13 results, $765,000 on the 2013-14 results and a proposed $1.5 million based on this year’s results”.
In case anybody has missed it, “Payment of a dividend of $765,000 based on 2013-14 results”, is reiterated as a ‘Highlight’ of the Annual Report.
These misleading claims appear to be deliberately repeated in order to imply that a dividend was paid during the reporting year.
In fact, VicForests paid no dividend in the 2014 – 2015 financial year. This is disclosed in Note 24, near the end of the report, where the truth is finally disclosed, “In the financial year ended 30 June 2015 no dividend was paid (2014: $250,000)”. Careful reading also reveals, on page 11, that the much vaunted payment was not made until July 2015, which is after the close of the 2014 – 2015 financial year.
VicForests misleading implication that it paid a dividend during the relevant financial year certainly seems to have confused the relevant minister. When questioned on the report in the Legislative Council on 12th November, the Minister for Agriculture, The Hon. Ms Pulford, informed Parliament, “VicForests will continue to be able to provide a dividend to the state. Since being established, VicForests has indeed returned dividends in excess of $6 million.”
In reporting this figure, Ms Pulford is over-generously including the dividend payment made during the current financial year and ignoring the fact that more than $5 million of the total was paid following the first two years of operation, before “mill-door” pricing was adopted. Only $250,000 has been paid since, in 2013-14. With the recent payment of $0.765 million included, a total of $6 million still represents a paltry return to the public purse of less than one-half of one per cent on total revenues around $1.2 billion!
VicForests’ failure to return a dividend in 2014 – 15 now makes it seven out of the last eight years in which the company has paid no dividend to the people of Victoria for the privilege of being allowed to log our public forests. Calculated according to a formula suggested by a URS Treasury review (2010), their accrued debt in respect of unpaid dividends, plus interest, now exceeds $93 million!