2016-02-11
4694. MS DUNN — To ask the Minister for Agriculture: In relation to the 2014–2015 VicForests Annual Report under “Financial Instruments part c. Credit risk”, and noting there is no mention of the large proportion of the $24.3 million owing to VicForests from one customer as was indicated in the VicForests 2013–2014 Annual Report:
(1) Does VicForests continue to provide supply of timber to customers who have long standing debts owing to VicForests;
(2) If supply of timber is continued to customers with poor credit ratings, what are the criteria on which the decision to terminate supply to such customers is based;
(3) What is the process for reporting on amounts due to VicForests given the substantial amounts still outstanding;
(4) In relation to the quantity and length of time that these monies are owing to VicForests, and given there is a substantial risk that these monies will not be paid to VicForests, has there been any independent assessment of these accounts;
(5) Are the significant payment issues faced by VicForests contractual, due to inadequate drafting of contracts and poor negotiation of contract terms;
(6) What is being done to ensure that new contracts are drafted, negotiated and executed on a more commercial basis;
(7) Will new customers be required to meet the costs of deliveries to their premises; and
(8) Are the significant receipt of receivables issues faced by VicForests due to inadequate debt recovery measures.
ANSWER:
(1) VicForests manages overdue accounts in a commercially prudent manner that maximises the potential to reclaim all money owing. VicForests manages its debts according to its Customer Credit Policy including measures such as continuing timber supply if a satisfactory debt repayment payment plan is agreed.
(2) VicForests actively manages receivables, as per the terms of timber sales agreements and their Customer Credit Policy, to ensure that the risk of non-payment is reduced.
(3) VicForests reports receivables information to its Board, which is responsible for managing VicForests commercial affairs.
(4) VicForests' annual report, including an assessment of its receivables, is thoroughly audited by the Victorian Auditor General's Office each year.
(5) VicForests is not experiencing significant payment issues. VicForests timber sales agreements are detailed contractual agreements with clearly defined responsibilities.
(6) VicForests timber sales agreements are already negotiated on a commercial basis aligning with industry standard terms and conditions.
(7) All VicForests customers meet the cost of timber deliveries to their premises.
(8) VicForests is not experiencing significant payment issues and has appropriate debt recovery measures in place.
Hon Jaala Pulford MP
Minister for Agriculture