Wednesday, April 28, 2010

MIS is a rort. Robert Belcher says scrap it and return Australian agriculture to an even playing field. FIAT says dont take away the corporate teat

From ABC radio Tasmanian "Country Hour" program 
Renewed calls to scrap MIS
Report: Sally Dakis/Rosemary Grant/Anna Vidot

"The head of Sustainable Agricultural Communities is urging the government to "bite the bullet" on forest managed investment schemes, in the wake of the collapse of Forest Enterprises.
It's the latest in a string of high-profile MIS company collapses and it's reignited the debate about what future role managed investment schemes have to play in forestry and other agricultural industries.
Sustainable Agricultural Communities Australia been calling on the federal government to scrap MIS since 2006, and has made submissions to the current reviews of the schemes.
Chairman of Sustainable Agricultural Communities Australia, Robert Belcher agrees significant regulatory changes are required for managed investment schemes.
"I would have thought after two senate inquiries that I've participated in that the Government would bite the bullet," he said.
"They haven't yet and I think the real worry here is that it has been a fantastic medium for governments to get philosophical changes to the natural resource at the expense of others, not them."
Chief executive of the Forest Industry Association Terry Edwards stands by managed investment schemes as way to promote plantation development.
He says while managed investment schemes need to be refined with tighter rules around the structure and greater protection to individual investors, they are still a sound business model.
"There's nothing fundamentally wrong with the structure, but there does need to be a tightening up of the rules around the structure.
Also greater protection to individual investors which is what's been lacking."
He says the current government review into MIS must investigate the reasons for the failures, and not embark a knee-jerk reaction.
"I think it's incumbent on the Federal Government to do a very, very careful of the reasons behind those collapses and don't over react," he said.
"One of the fundamental bases for the MIS structure is to bring city money into rural communities and it would be I think a travesty to throw the baby out with the bath water."
Forestry Tasmania's managing director agrees its been the operation of managed investment schemes, and not the schemes themselves that's been the downfall of the sector.
Bob Gordon says the challenge now is to find a new way to put long-term agricultural investments on a level playing field in the market.
"Investing in forests is a little bit different to investing in other crops in that you spend all of your money in the first few years and you've got to wait sometimes twenty years to get your money back.
"So you need some way of making sure that long-term investments aren't penalised," he says.
"I think there are other ways to get investment in long-term forestry, certainly the big US Timberlands investors have come into Australia in a fairly big way and I know some of the Australian, particularly the industry super funds, are interested in long-term, sustainable forestry investments."
In this report: Robert Belcher, Sustainable Agricultural Communities Australia; Terry Edwards, the chief executive of the Forest Industry Association; Forestry Tasmania's managing director, Bob Gordon".


  1. I wonder what Terry Edwards says about conversion of agricultural land to plantation, and indeed, the conversion of native forest to plantation - a practice which despite rhetoric to the contrary, is still continuing.

  2. They all fall over in the end, be it ostrich farms, trees or a 'seat' on the 'Concord' scheme last decade. Last ones on lose their dough.
    The Reagan administration done away with MIS in the 1980's. It was considered unsustainable back then.
    From memory I recall that Oz is only one of two countries left that support MIS schemes.

  3. I love Terry Edward's statement that MIS schemes are a "sound business model".
    Right Terry. Sound but incredibly conflicted and with an awful lot of blood on its hands.