2016-02-02
MS DUNN: To ask the Minister for Agriculture: In relation to the 2014/2015 VicForests Annual Report under “Provisions–other provisions” which states “VicForests has recognised provisions for probable price adjustments and credit notes where current contract negotiations are likely to lead to some retrospective adjustments”, with a provision of $2.26 million:
(1) What steps have you taken to ensure that future VicForests contracts are not subject to retrospective adjustments; and
(2) What is the nature of future problems with contracts recognised in this provision.
ANSWER:
VicForests is required to manage its arrangements in a commercially prudent manner. Like any other well run commercial enterprise, VicForests recognises the potential need for retrospective adjustments that may arise from current contract arrangements.
On page 33, note 1(v) of VicForests 2014-15 Annual Report, VicForests recognises the need for the provision for the portion of the Community Forestry grant from the Victorian Government. The payment for the transfer of responsibilities for Community Forestry from the former Department of Environment and Primary Industries to VicForests makes up almost all of “other provisions” reported.
Question # 4693