❓ A parliamentary question regarding the Timber Industry Assistance Program raises concerns about inconsistent application of multiplying factors in business exit assistance calculations. The Minister acknowledges the variability but declines to disclose specific business details.
AnsweredQoN 1431Legislative Council
QuestionView source ↗
TIMBER INDUSTRY ASSISTANCE PROGRAM AND BUSINESS EXIT ASSISTANCE
My question concerns the timber industry assistance program and business exit assistance. (1) It appears that different accounting firms are using different multiplying factors to prepare earnings before interest and tax plans. These multiplying factors vary between less than five to over seven, and this makes a huge difference to the outcome. What is the minister’s comment? (2) Will the minister explain why this is happening? (3) Will the minister give the names of the businesses awarded compensation, the amount awarded, the accounting firm used to assess and prepare the business exit packages and link this to the businesses paid out? (4) What is the multiple factor used for estimating the earnings before interest and tax for each of the businesses awarded compensation? Hon KEN TRAVERS
My question concerns the timber industry assistance program and business exit assistance. (1) It appears that different accounting firms are using different multiplying factors to prepare earnings before interest and tax plans. These multiplying factors vary between less than five to over seven, and this makes a huge difference to the outcome. What is the minister’s comment? (2) Will the minister explain why this is happening? (3) Will the minister give the names of the businesses awarded compensation, the amount awarded, the accounting firm used to assess and prepare the business exit packages and link this to the businesses paid out? (4) What is the multiple factor used for estimating the earnings before interest and tax for each of the businesses awarded compensation? Hon KEN TRAVERS
AnswerView source ↗
I thank the member for some notice of this question. (1) The member is referring to the calculations required to determine the level of business exit assistance offered to applicants. Earnings before interest and tax form part of those calculations. The capitalisation rate - the multiplier - is determined after considering specific issues relating to the business, including the extent and nature of the competition, the quality of earnings, growth prospects, contractual arrangements, industry trends and relative business risks, log timber contract of sale quantities, and length of time in the industry etc. (2) The methodology used to determine the recommended level of BEA is a standard approach to capitalisation of estimated future maintainable earnings. This requires the capitalisation of the earnings of the business at a multiple; that is, a rate of return that reflects the risks of the business and the stream of income that it generates. There is no standard multiplier as each business is different. (3)-(4) I must advise the member that the offer of BEA is to provide reasonable financial assistance to help a business leave the native hardwood timber industry. They are not payments for compensation. The Minister for State Development is happy to discuss with the member the amount of assistance provided and the multiplier used but is not prepared to release the figures at this stage.
(1) It appears that different accounting firms are using different multiplying factors to prepare earnings before interest and tax plans. These multiplying factors vary between less than five to over seven, and this makes a huge difference to the outcome. What is the minister’s comment? (2) Will the minister explain why this is happening? (3) Will the minister give the names of the businesses awarded compensation, the amount awarded, the accounting firm used to assess and prepare the business exit packages and link this to the businesses paid out? (4) What is the multiple factor used for estimating the earnings before interest and tax for each of the businesses awarded compensation? Hon KEN TRAVERS replied: I thank the member for some notice of this question. (1) The member is referring to the calculations required to determine the level of business exit assistance offered to applicants. Earnings before interest and tax form part of those calculations. The capitalisation rate - the multiplier - is determined after considering specific issues relating to the business, including the extent and nature of the competition, the quality of earnings, growth prospects, contractual arrangements, industry trends and relative business risks, log timber contract of sale quantities, and length of time in the industry etc. (2) The methodology used to determine the recommended level of BEA is a standard approach to capitalisation of estimated future maintainable earnings. This requires the capitalisation of the earnings of the business at a multiple; that is, a rate of return that reflects the risks of the business and the stream of income that it generates. There is no standard multiplier as each business is different. (3)-(4) I must advise the member that the offer of BEA is to provide reasonable financial assistance to help a business leave the native hardwood timber industry. They are not payments for compensation. The Minister for State Development is happy to discuss with the member the amount of assistance provided and the multiplier used but is not prepared to release the figures at this stage.
(2) Will the minister explain why this is happening? (3) Will the minister give the names of the businesses awarded compensation, the amount awarded, the accounting firm used to assess and prepare the business exit packages and link this to the businesses paid out? (4) What is the multiple factor used for estimating the earnings before interest and tax for each of the businesses awarded compensation? Hon KEN TRAVERS replied: I thank the member for some notice of this question. (1) The member is referring to the calculations required to determine the level of business exit assistance offered to applicants. Earnings before interest and tax form part of those calculations. The capitalisation rate - the multiplier - is determined after considering specific issues relating to the business, including the extent and nature of the competition, the quality of earnings, growth prospects, contractual arrangements, industry trends and relative business risks, log timber contract of sale quantities, and length of time in the industry etc. (2) The methodology used to determine the recommended level of BEA is a standard approach to capitalisation of estimated future maintainable earnings. This requires the capitalisation of the earnings of the business at a multiple; that is, a rate of return that reflects the risks of the business and the stream of income that it generates. There is no standard multiplier as each business is different. (3)-(4) I must advise the member that the offer of BEA is to provide reasonable financial assistance to help a business leave the native hardwood timber industry. They are not payments for compensation. The Minister for State Development is happy to discuss with the member the amount of assistance provided and the multiplier used but is not prepared to release the figures at this stage.
(3) Will the minister give the names of the businesses awarded compensation, the amount awarded, the accounting firm used to assess and prepare the business exit packages and link this to the businesses paid out? (4) What is the multiple factor used for estimating the earnings before interest and tax for each of the businesses awarded compensation? Hon KEN TRAVERS replied: I thank the member for some notice of this question. (1) The member is referring to the calculations required to determine the level of business exit assistance offered to applicants. Earnings before interest and tax form part of those calculations. The capitalisation rate - the multiplier - is determined after considering specific issues relating to the business, including the extent and nature of the competition, the quality of earnings, growth prospects, contractual arrangements, industry trends and relative business risks, log timber contract of sale quantities, and length of time in the industry etc. (2) The methodology used to determine the recommended level of BEA is a standard approach to capitalisation of estimated future maintainable earnings. This requires the capitalisation of the earnings of the business at a multiple; that is, a rate of return that reflects the risks of the business and the stream of income that it generates. There is no standard multiplier as each business is different. (3)-(4) I must advise the member that the offer of BEA is to provide reasonable financial assistance to help a business leave the native hardwood timber industry. They are not payments for compensation. The Minister for State Development is happy to discuss with the member the amount of assistance provided and the multiplier used but is not prepared to release the figures at this stage.
(4) What is the multiple factor used for estimating the earnings before interest and tax for each of the businesses awarded compensation? Hon KEN TRAVERS replied: I thank the member for some notice of this question. (1) The member is referring to the calculations required to determine the level of business exit assistance offered to applicants. Earnings before interest and tax form part of those calculations. The capitalisation rate - the multiplier - is determined after considering specific issues relating to the business, including the extent and nature of the competition, the quality of earnings, growth prospects, contractual arrangements, industry trends and relative business risks, log timber contract of sale quantities, and length of time in the industry etc. (2) The methodology used to determine the recommended level of BEA is a standard approach to capitalisation of estimated future maintainable earnings. This requires the capitalisation of the earnings of the business at a multiple; that is, a rate of return that reflects the risks of the business and the stream of income that it generates. There is no standard multiplier as each business is different. (3)-(4) I must advise the member that the offer of BEA is to provide reasonable financial assistance to help a business leave the native hardwood timber industry. They are not payments for compensation. The Minister for State Development is happy to discuss with the member the amount of assistance provided and the multiplier used but is not prepared to release the figures at this stage.
Hon KEN TRAVERS replied: I thank the member for some notice of this question. (1) The member is referring to the calculations required to determine the level of business exit assistance offered to applicants. Earnings before interest and tax form part of those calculations. The capitalisation rate - the multiplier - is determined after considering specific issues relating to the business, including the extent and nature of the competition, the quality of earnings, growth prospects, contractual arrangements, industry trends and relative business risks, log timber contract of sale quantities, and length of time in the industry etc. (2) The methodology used to determine the recommended level of BEA is a standard approach to capitalisation of estimated future maintainable earnings. This requires the capitalisation of the earnings of the business at a multiple; that is, a rate of return that reflects the risks of the business and the stream of income that it generates. There is no standard multiplier as each business is different. (3)-(4) I must advise the member that the offer of BEA is to provide reasonable financial assistance to help a business leave the native hardwood timber industry. They are not payments for compensation. The Minister for State Development is happy to discuss with the member the amount of assistance provided and the multiplier used but is not prepared to release the figures at this stage.
I thank the member for some notice of this question. (1) The member is referring to the calculations required to determine the level of business exit assistance offered to applicants. Earnings before interest and tax form part of those calculations. The capitalisation rate - the multiplier - is determined after considering specific issues relating to the business, including the extent and nature of the competition, the quality of earnings, growth prospects, contractual arrangements, industry trends and relative business risks, log timber contract of sale quantities, and length of time in the industry etc. (2) The methodology used to determine the recommended level of BEA is a standard approach to capitalisation of estimated future maintainable earnings. This requires the capitalisation of the earnings of the business at a multiple; that is, a rate of return that reflects the risks of the business and the stream of income that it generates. There is no standard multiplier as each business is different. (3)-(4) I must advise the member that the offer of BEA is to provide reasonable financial assistance to help a business leave the native hardwood timber industry. They are not payments for compensation. The Minister for State Development is happy to discuss with the member the amount of assistance provided and the multiplier used but is not prepared to release the figures at this stage.
(1) The member is referring to the calculations required to determine the level of business exit assistance offered to applicants. Earnings before interest and tax form part of those calculations. The capitalisation rate - the multiplier - is determined after considering specific issues relating to the business, including the extent and nature of the competition, the quality of earnings, growth prospects, contractual arrangements, industry trends and relative business risks, log timber contract of sale quantities, and length of time in the industry etc. (2) The methodology used to determine the recommended level of BEA is a standard approach to capitalisation of estimated future maintainable earnings. This requires the capitalisation of the earnings of the business at a multiple; that is, a rate of return that reflects the risks of the business and the stream of income that it generates. There is no standard multiplier as each business is different. (3)-(4) I must advise the member that the offer of BEA is to provide reasonable financial assistance to help a business leave the native hardwood timber industry. They are not payments for compensation. The Minister for State Development is happy to discuss with the member the amount of assistance provided and the multiplier used but is not prepared to release the figures at this stage.
(2) The methodology used to determine the recommended level of BEA is a standard approach to capitalisation of estimated future maintainable earnings. This requires the capitalisation of the earnings of the business at a multiple; that is, a rate of return that reflects the risks of the business and the stream of income that it generates. There is no standard multiplier as each business is different. (3)-(4) I must advise the member that the offer of BEA is to provide reasonable financial assistance to help a business leave the native hardwood timber industry. They are not payments for compensation. The Minister for State Development is happy to discuss with the member the amount of assistance provided and the multiplier used but is not prepared to release the figures at this stage.
(3)-(4) I must advise the member that the offer of BEA is to provide reasonable financial assistance to help a business leave the native hardwood timber industry. They are not payments for compensation. The Minister for State Development is happy to discuss with the member the amount of assistance provided and the multiplier used but is not prepared to release the figures at this stage.
(1) It appears that different accounting firms are using different multiplying factors to prepare earnings before interest and tax plans. These multiplying factors vary between less than five to over seven, and this makes a huge difference to the outcome. What is the minister’s comment? (2) Will the minister explain why this is happening? (3) Will the minister give the names of the businesses awarded compensation, the amount awarded, the accounting firm used to assess and prepare the business exit packages and link this to the businesses paid out? (4) What is the multiple factor used for estimating the earnings before interest and tax for each of the businesses awarded compensation? Hon KEN TRAVERS replied: I thank the member for some notice of this question. (1) The member is referring to the calculations required to determine the level of business exit assistance offered to applicants. Earnings before interest and tax form part of those calculations. The capitalisation rate - the multiplier - is determined after considering specific issues relating to the business, including the extent and nature of the competition, the quality of earnings, growth prospects, contractual arrangements, industry trends and relative business risks, log timber contract of sale quantities, and length of time in the industry etc. (2) The methodology used to determine the recommended level of BEA is a standard approach to capitalisation of estimated future maintainable earnings. This requires the capitalisation of the earnings of the business at a multiple; that is, a rate of return that reflects the risks of the business and the stream of income that it generates. There is no standard multiplier as each business is different. (3)-(4) I must advise the member that the offer of BEA is to provide reasonable financial assistance to help a business leave the native hardwood timber industry. They are not payments for compensation. The Minister for State Development is happy to discuss with the member the amount of assistance provided and the multiplier used but is not prepared to release the figures at this stage.
(2) Will the minister explain why this is happening? (3) Will the minister give the names of the businesses awarded compensation, the amount awarded, the accounting firm used to assess and prepare the business exit packages and link this to the businesses paid out? (4) What is the multiple factor used for estimating the earnings before interest and tax for each of the businesses awarded compensation? Hon KEN TRAVERS replied: I thank the member for some notice of this question. (1) The member is referring to the calculations required to determine the level of business exit assistance offered to applicants. Earnings before interest and tax form part of those calculations. The capitalisation rate - the multiplier - is determined after considering specific issues relating to the business, including the extent and nature of the competition, the quality of earnings, growth prospects, contractual arrangements, industry trends and relative business risks, log timber contract of sale quantities, and length of time in the industry etc. (2) The methodology used to determine the recommended level of BEA is a standard approach to capitalisation of estimated future maintainable earnings. This requires the capitalisation of the earnings of the business at a multiple; that is, a rate of return that reflects the risks of the business and the stream of income that it generates. There is no standard multiplier as each business is different. (3)-(4) I must advise the member that the offer of BEA is to provide reasonable financial assistance to help a business leave the native hardwood timber industry. They are not payments for compensation. The Minister for State Development is happy to discuss with the member the amount of assistance provided and the multiplier used but is not prepared to release the figures at this stage.
(3) Will the minister give the names of the businesses awarded compensation, the amount awarded, the accounting firm used to assess and prepare the business exit packages and link this to the businesses paid out? (4) What is the multiple factor used for estimating the earnings before interest and tax for each of the businesses awarded compensation? Hon KEN TRAVERS replied: I thank the member for some notice of this question. (1) The member is referring to the calculations required to determine the level of business exit assistance offered to applicants. Earnings before interest and tax form part of those calculations. The capitalisation rate - the multiplier - is determined after considering specific issues relating to the business, including the extent and nature of the competition, the quality of earnings, growth prospects, contractual arrangements, industry trends and relative business risks, log timber contract of sale quantities, and length of time in the industry etc. (2) The methodology used to determine the recommended level of BEA is a standard approach to capitalisation of estimated future maintainable earnings. This requires the capitalisation of the earnings of the business at a multiple; that is, a rate of return that reflects the risks of the business and the stream of income that it generates. There is no standard multiplier as each business is different. (3)-(4) I must advise the member that the offer of BEA is to provide reasonable financial assistance to help a business leave the native hardwood timber industry. They are not payments for compensation. The Minister for State Development is happy to discuss with the member the amount of assistance provided and the multiplier used but is not prepared to release the figures at this stage.
(4) What is the multiple factor used for estimating the earnings before interest and tax for each of the businesses awarded compensation? Hon KEN TRAVERS replied: I thank the member for some notice of this question. (1) The member is referring to the calculations required to determine the level of business exit assistance offered to applicants. Earnings before interest and tax form part of those calculations. The capitalisation rate - the multiplier - is determined after considering specific issues relating to the business, including the extent and nature of the competition, the quality of earnings, growth prospects, contractual arrangements, industry trends and relative business risks, log timber contract of sale quantities, and length of time in the industry etc. (2) The methodology used to determine the recommended level of BEA is a standard approach to capitalisation of estimated future maintainable earnings. This requires the capitalisation of the earnings of the business at a multiple; that is, a rate of return that reflects the risks of the business and the stream of income that it generates. There is no standard multiplier as each business is different. (3)-(4) I must advise the member that the offer of BEA is to provide reasonable financial assistance to help a business leave the native hardwood timber industry. They are not payments for compensation. The Minister for State Development is happy to discuss with the member the amount of assistance provided and the multiplier used but is not prepared to release the figures at this stage.
Hon KEN TRAVERS replied: I thank the member for some notice of this question. (1) The member is referring to the calculations required to determine the level of business exit assistance offered to applicants. Earnings before interest and tax form part of those calculations. The capitalisation rate - the multiplier - is determined after considering specific issues relating to the business, including the extent and nature of the competition, the quality of earnings, growth prospects, contractual arrangements, industry trends and relative business risks, log timber contract of sale quantities, and length of time in the industry etc. (2) The methodology used to determine the recommended level of BEA is a standard approach to capitalisation of estimated future maintainable earnings. This requires the capitalisation of the earnings of the business at a multiple; that is, a rate of return that reflects the risks of the business and the stream of income that it generates. There is no standard multiplier as each business is different. (3)-(4) I must advise the member that the offer of BEA is to provide reasonable financial assistance to help a business leave the native hardwood timber industry. They are not payments for compensation. The Minister for State Development is happy to discuss with the member the amount of assistance provided and the multiplier used but is not prepared to release the figures at this stage.
I thank the member for some notice of this question. (1) The member is referring to the calculations required to determine the level of business exit assistance offered to applicants. Earnings before interest and tax form part of those calculations. The capitalisation rate - the multiplier - is determined after considering specific issues relating to the business, including the extent and nature of the competition, the quality of earnings, growth prospects, contractual arrangements, industry trends and relative business risks, log timber contract of sale quantities, and length of time in the industry etc. (2) The methodology used to determine the recommended level of BEA is a standard approach to capitalisation of estimated future maintainable earnings. This requires the capitalisation of the earnings of the business at a multiple; that is, a rate of return that reflects the risks of the business and the stream of income that it generates. There is no standard multiplier as each business is different. (3)-(4) I must advise the member that the offer of BEA is to provide reasonable financial assistance to help a business leave the native hardwood timber industry. They are not payments for compensation. The Minister for State Development is happy to discuss with the member the amount of assistance provided and the multiplier used but is not prepared to release the figures at this stage.
(1) The member is referring to the calculations required to determine the level of business exit assistance offered to applicants. Earnings before interest and tax form part of those calculations. The capitalisation rate - the multiplier - is determined after considering specific issues relating to the business, including the extent and nature of the competition, the quality of earnings, growth prospects, contractual arrangements, industry trends and relative business risks, log timber contract of sale quantities, and length of time in the industry etc. (2) The methodology used to determine the recommended level of BEA is a standard approach to capitalisation of estimated future maintainable earnings. This requires the capitalisation of the earnings of the business at a multiple; that is, a rate of return that reflects the risks of the business and the stream of income that it generates. There is no standard multiplier as each business is different. (3)-(4) I must advise the member that the offer of BEA is to provide reasonable financial assistance to help a business leave the native hardwood timber industry. They are not payments for compensation. The Minister for State Development is happy to discuss with the member the amount of assistance provided and the multiplier used but is not prepared to release the figures at this stage.
(2) The methodology used to determine the recommended level of BEA is a standard approach to capitalisation of estimated future maintainable earnings. This requires the capitalisation of the earnings of the business at a multiple; that is, a rate of return that reflects the risks of the business and the stream of income that it generates. There is no standard multiplier as each business is different. (3)-(4) I must advise the member that the offer of BEA is to provide reasonable financial assistance to help a business leave the native hardwood timber industry. They are not payments for compensation. The Minister for State Development is happy to discuss with the member the amount of assistance provided and the multiplier used but is not prepared to release the figures at this stage.
(3)-(4) I must advise the member that the offer of BEA is to provide reasonable financial assistance to help a business leave the native hardwood timber industry. They are not payments for compensation. The Minister for State Development is happy to discuss with the member the amount of assistance provided and the multiplier used but is not prepared to release the figures at this stage.
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