Statement: DAFF response to ANAO Tasmanian Forestry Exit Grants Program Audit

15 March 2013

Corruption claims

The Department of Agriculture, Fisheries and Forestry (DAFF) rejects allegations made by Senator Christine Milne that it has acted corruptly in managing the Tasmanian Forests Intergovernmental Agreement Contractors Voluntary Exit Grants Program.

There is no information in the Australian National Audit Office’s (ANAO) audit of the program that supports suggestions of corruption or wrongdoing.

If Senator Milne, or any member of the public, has information to support corruption allegations, DAFF would welcome it being forwarded to the appropriate authorities.

Administration of the grants program

The program is one initiative designed to help the Tasmanian economy diversify.

The grants program was established to help Tasmanian harvest and haulage contractors to adjust to difficult conditions in the Tasmanian economy, including a downturn in the forestry industry and the exit of Gunns Limited from native forest logging.

In this regard, DAFF’s administration of the program was successful. The people that needed help and support from DAFF received it quickly.

In fact, the ANAO Audit found DAFF’s management of the grants program to be proficient in:

  • establishing the program quickly
  • administering the program efficiently
  • distributing the majority of funding within the required timeframes
  • having a practical and efficient approach to funding deed management.

The grants program has been run to help industry adjust over the long–term. That is why the focus has been on contracting capacity.

ANAO Audit findings

After discussions with the Tasmanian Government, DAFF set the program’s target to reduce 1.5 million tonnes of contracted capacity in the industry. The ANAO report based its findings on actual tonnes harvested and hauled in a single year.

However, actual tonnage is variable, year to year, due to seasonal and market conditions. That variability is why DAFF based its target on contracted capacity.

The grants program removed 1.4 million tonnes of harvest contracted capacity and two million tonnes of haulage capacity from the industry.

DAFF believes this more than meets the target of 1.5 million tonnes.

The ANAO report found the guidelines should have stated more clearly the intention to remove contracted capacity and DAFF has taken that advice on board.

DAFF has also agreed to implement the ANAO’s recommendations regarding record keeping and action has already been taken to:

  • improve the quality and transparency of grant assessment processes
  • provide advice to applicants of any significant changes to assessment processes and the methods used to determine grant offers
  • develop compliance strategies early in the design phase to incorporate into guidelines and funding agreements.

In instances where fraudulent applications for assistance are submitted, the department will take appropriate action. DAFF will only make a public comment about any findings of fraud once investigation processes are complete.