Sunday, 11 February 2007

Is this the truth about MIS investments?

I came across this article by "Jarvis Cocker" from last year on Tasmanian Times. I'd be interested to see if there's any long-term analysis of the effectiveness of timber plantation Managed Investment Schemes. This report (PDF 97KB) certainly raises some doubts. And I found this too.
It's interesting to see the same problem besetting the grape industry, as this report notes. One has to wonder what's going to happen to all the money invested in these schemes. Will it turn to dust? Can we estimate the returns on these schemes? If there is a permanent wine glut for instance, what value a vine, or the MIS that owns it? I think this demonstrates the potential danger in skewing the apparent value of investments with such a high incentive as the 100% tax deduction which can be available for investors in an MIS.
Rumour has it of course that Tasmania's pine plantations have been badly managed, and we know that a lot of logs have been exported unprocessed. Who lost what on that then? I wonder how long the exported logs would have kept 300 people employed at Scottsdale. And how many people will this pulp mill employ in the end anyway? And if the bottom falls out of the plantation market, how cheaply will Forestry Tasmania sell our native forests just to keep big business IN business. You should read this quite hard-nosed assessment of Tasmania's forestry business from the end of 2005.

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