South-East Forestry Partnerships Program

15 Nov 2012 questionsarchive

I seek leave to make an explanation before directing a question to the Minister for Forests on the subject of the South-East Forestry Partnerships Program.

The Hon. J.M.A. LENSINK: In early September the opposition, with the support of the entire South-East community reliant on the forest industry, urged the minister and her government to extend any assistance being offered to Carter Holt Harvey to other millers. All these regional timber companies have been affected by the high Australian dollar and the importation of logs from Europe and the United States.

The government has now abandoned talks with Carter Holt Harvey, retracting that $27 million bailout package and promising it will be diverted to the industry at large. However, it has been reported that this package will be restricted. According to a report in The Australian it will only go to those companies that have contracts with the company which bought the publicly-owned forest resource, OneFortyOne Plantations. Furthermore, the forest workers union says the bailout is not enough to sustain the sector. According to union district secretary, Brad Coates, 'The $27 million will have no effect whatsoever.' My questions for the minister are:

1.Why did the talks break down with Carter Holt Harvey?

2.Are negotiations continuing with Carter Holt Harvey regarding lower log prices?

3.Is assistance limited to companies that hold direct contracts with OneFortyOne Plantations?

4.What assistance will be offered to other timber companies without contracts with OneFortyOne Plantations, which are just as seriously affected by the industry crisis and the government's mismanagement of the forest sector?

5.When will the forest minister go to the South-East and hold public meetings with South-East timber workers and their families?

The Hon. G.E. GAGO (Minister for Agriculture, Food and Fisheries, Minister for Forests, Minister for Regional Development, Minister for Tourism, Minister for the Status of Women) (14:30): I thank the honourable member for her important questions. It is a disgraceful distortion of the truth in terms of Carter Holt Harvey. They approached the government in negotiations and wanted to reduce the price on logs. I have outlined that in this place before in great detail.

The government was in negotiations with them for some time. We offered a significant assistance package, and they would not accept it. So, they walked away from the table. As I have said, it was a significant package, and they would not have a bar of it. So, we have redirected those funds. Again, I would have thought that the opposition should be getting to their feet to congratulate this government for this $27 million package—a significant investment package—to go to the South-East industry to assist the industry to restructure and to assist them through this really difficult time.

The South-East Forestry Partnerships Program was announced recently to facilitate the forestry industry's recovery by encouraging further investment in new and existing businesses. The program, as I have said, is a $27 million merit-based state government grant program, which is available over two years and which is accessible by eligible applicants in the South-East who have or able to enter into contractual relations with OneFortyOne Plantations Pty Ltd.

All grants will be conditional on the recipient entering into a legally-binding contract to purchase minimum volumes of log from OneFortyOne in terms that are agreed between OneFortyOne and the grant recipient. The industry assistance is to be provided over two years, payable upon achievement of key milestones, as defined in the funding agreement. Millers in the South-East who are not currently customers of OneFortyOne should not be discouraged as the government is very keen to facilitate appropriate contracts with OneFortyOne for them.

The following are the sorts of criteria that will ensure that these funds are spent to meet the objects we are trying to achieve. The broad objectives are to encourage forest utilisation to promote regional economic development and to contribute to the sustainable workforce. This may be achieved through initiatives, such as support further value-adding along the timer supply chain; support innovation and the introduction of new technologies; attract further investment into the region; attract or develop new skill sets and career opportunities; develop renewable energy opportunities.

Applications that commit to cash contributions matching or exceeding the amount of the government's grant contributions obviously are going to be viewed very favourable. Projects proposals that leverage a higher ratio of private funding are also highly desirable, and they are going to be considered more favourably as well.

Applicants must be able to demonstrate the value of their project to the state and to the South-East region and how it builds on the industry's competitive strengths and may diversify the forest and forest products industry. This was in response to the concerns that were raised about job security in that region in relation to the selling of the forward rotations of the forests there, so this is a strategy that was specifically designed to assist millers and other key stakeholders in that industry. As I said, this is a wonderful opportunity—$27 million that has been directed to assist the industry to redirect and restructure—and more than happy to do that.

Members interjecting:

The Hon. G.E. GAGO: I have met with the union; I've met with them on a couple of occasions. It is absolute nonsense that I have not met with the unions, a nonsense. I have also met with the chair of the round table as well on a number of occasions, so it is absolute rubbish. This is the distortion of the truth that we see the opposition comes into this place with time and time again—distorting the truth, distorting the facts, distorting the figures. This is a fabulous initiative and it will inject real vigour into the industry. It offers great assurance in terms of the future direction of the industry and, as I said, the opposition should be standing up and congratulating this government for its vision and foresight.