Posted
Queensland's former Newman government sold off a
state-owned company combating climate change despite being told in
confidential briefing documents that it was a "profitable, cash flow
positive and standalone entity" whose revenues were set to double.
Key points:
- A former senior manager said the sale was ideologically driven
- One confidential government briefing note said Ecofund was a "market leader"
- The Newman Government sold Ecofund for $250,000
The ABC has obtained a raft of Cabinet briefing documents and internal government savings proposals outlining moves to slash millions from programs under the former LNP administration.
The files were prepared in 2012 for Cabinet's razor gang knowns as the Budget Review Committee.
One of its targets was Ecofund Queensland, a state-owned carbon and environmental offsetting and advisory company that was also tasked with buying up land to help reduce Queensland's greenhouse gas emissions.
The company was one of the top three carbon traders in the Australian market and its clients included some of the country's largest blue chip firms.
Despite being told in the briefing documents that Ecofund's revenue was set to grow to $40 million within two years, the Newman government sold it for $250,000.
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"It was profitable and its revenue was growing," a former senior manager told the ABC. "But [Campbell] Newman didn't give it a chance because he was ideologically opposed to this sort of initiative."
'I would say it was killed off'
A former Ecofund director also described the sale as ideologically-driven.
"It wasn't sold off, I would say it was killed off," he said.
But another former director said trading in carbon credits was not the role of government.
"The carbon tax was abolished shortly after the sale and I think we were lucky to get out when we did," she said.
During its operation Ecofund received no government funding, with all its expenses and operating costs — including IT, lease of premises and Board fees — covered by the company's revenue.
In its first full year of trading the company ended the financial year with a deficit of $645,000, but it held $1.8 million in cash on its balance sheet.
In its second year it made a profit of about $70,000.
Ecofund's revenue forecast to double before sale
One confidential government briefing note said Ecofund was a "market leader" that had "achieved the shareholder's financial performance targets and was tracking well over the original Queensland Treasury Corporation's modelling for the first year of operations".
It also noted that the company's revenue was forecast to more than double to $40 million in 2014/15, with dividends going towards the acquisition of land for national parks or back into government coffers.
Despite this, the Newman government later sold Ecofund to private firm CO2 Australia for $250,000.
Company needed to be 'wound up': LNP
Opposition leader Tim Nicholls, who was treasurer at the time, defended the sale in a statement."The Ecofund Board recommended the offer by CO2 be accepted because if it wasn't the company would have needed to be wound up at a cost of between [$490,000 and $540,000] to the state," his office said.
The Environment Department has told the ABC that Ecofund was a "standalone entity" that was "solvent at the time of sale".
Environment Minister Steven Miles said it was a tragedy the company was sold off.
"There was a company here set to make good money for Queensland taxpayers, doing something very important to our future, and they just got rid of it. Something that could have brought in $40 million they gave away for $250,000. That's disgusting," he said.
More than 100,000 hectares of land had been secured by Ecofund as environmental offsets and national parks before the company was sold.
Its clients in its carbon offsetting program included Australia's largest resource and gas companies including Santos, Origin, APLNG and CS Energy.
Among its other clients were Virgin Australia, Macarthur Coal and the Brisbane City Council.
"Ecofund's client book was the envy of industry, and was worth millions on its own," said the former senior manager.Ecofund was not the only climate change or carbon project slashed or sold off by the Newman government.
The internal budget document obtained by the ABC reveals that another program — the Energy and Carbon Reporting Framework — was cut in order to save $180,000.
This was despite the program aiming to deliver $14 million in savings to the government through "efficiency dividends… from corporations undertaking effective energy and carbon management" as part of the framework.
The budget document went on to warn the LNP administration that cuts to climate change initiatives "would constrain the Department's technical climate change expertise and represent a substantial loss of corporate knowledge".
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