Friday, 30 May 2014

Understanding macro accounting

The broken promises and shameless lies of the recent Federal budget are easily justified if one accepts the  argument of the Liberal Member for Lyons.

Just like the millions of Australians it represents who all have to live within their means, this Government believes that our country has to be financially responsible for the sake of our children and grandchildren.”

Sounds plausible?

One problem however. It’s false.

Sophistry at best. Another lie at worst.

Sunday, 25 May 2014

Tax model is failing

THE Tasmanian Government’s budgetary problems are simple – it is essentially a service deliverer spending more than it is receiving.

Borrowings would be imprudent as there’s not enough to pay interest.

The past four years’ excess spending has been funded with amounts intended for other purposes, mainly funds in advance from the Federal Government such as the $290 million received to redevelop the Royal Hobart Hospital.

The GST, lauded as a growth tax until 2008, raised funds at a faster rate than overall economic growth and seduced state governments to expand their programs.

Saturday, 24 May 2014

Shree staggers

Winter is a wild and woolly time down the West Coast of Tasmania.

Even bleaker for those not getting paid as expected.

Shree Minerals announcement to ASX was a carefully worded attempt not to scare the horses too much.

Shree stated : “While the company believes recent iron ore price declines are not reflective of medium term fundamentals and expects demand to continue to grow in the Asian markets, it is taking steps to optimise costs in the prevailing market conditions.”

Essentially what they’re saying is they’ll be able to pay their way if prices pick up.

Other than announcing they’d struck gold with another source of funds that’s all they could have said.

Apart from shareholders, working capital has been provided by Frost Global who have agreed to advance working capital to be repaid at the rate of US$500,000 each time Frost Global receives a shipload of ore

The last thing Shree, or Frost Global would want right now is an insolvency administration taken over by the creditors.

Sunday, 18 May 2014

Shree: Another mining accident waiting to happen?

The almost daily reports about falling iron ore prices and the chatter about the effects on junior miners has shone the spotlight on Shree Minerals’ Nelson Bay River iron ore mine on Tasmania’s West Coast, as it battles to stay afloat.

Trying to understand what’s happening is best with knowledge of Shree’s recent history.

Sunday, 11 May 2014

Ta Ann's last handout

Is this the last handout?

Last July one of the countless pre election promises made by Kevin Rudd was $7.5 million to help Ta Ann Tasmania (TAT) build a new plywood mill.

Relying on endemic amnesia amongst voters, the shameless local member elected at the same time as Kevin Rudd’s brief reappearance thankfully ended, last week was able to proudly announce that he had secured the $7.5 million handout for TAT.

TAT, it was claimed will contribute $8.3 million towards the construction of the $15.8 million facility in Smithton.

That’s a bit of an overstatement as $5.7 million is due soon, also from the Australian Government, as final settlement of the $26 million for surrendering 108,000 m3 of its annual wood supply as per the Tasmanian Forests Agreement.

So TAT will only have to find $2.6 million.

The Smithton plant go-ahead came hard on the heels of the release of TAT’s 2013 financial statements (its financial year ended on 31st December) as well as that of the ultimate holding company, Ta Ann Holdings Berhad, listed in Malaysia.

The reports offer an intriguing look at how the group operates.