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Thursday, 29 May 1997
Page: 3955

Senator MURPHY(10.53 a.m.) —by leave—I move:

1. That the Export Control (Regional Forest Agreements) Regulations, as contained in Statutory Rules 1997 No. 77 and made under the Export Control Act 1982, be disallowed.

2. That the Senate—

(a)   notes with concern the continued failure of the Government to meet an express election commitment to establish a Wood and Paper Industry Council to drive a wood and paper industry strategy and encourage industry development, downstream processing and investment; and

   (b)   resolves that the Export Control (Regional Forest Agreements) Regulations as contained in Statutory Rules 1997, No. 77 and made under the Export Control Act 1982, be disallowed.

In moving this disallowance motion, can I say that I do not do this lightly. I do not like moving disallowance motions in relation to regulations, particularly in respect of the forest industry, but I am doing this because the government has reneged on a number of very important aspects of the national forest policy statement. Before I go too much further, I wish to say that I understand Senator Harradine will be moving an amendment to my motion, and I indicate that that is acceptable from my point of view. As I said, the reason I am moving this disallowance motion on behalf of Senator Brown and me is that the government has reneged on a whole range of areas that are associated with the development and implementation of the national forest policy statement.

Can I just go to the national forest policy statement itself and the vision that it had—a vision that was signed on to by all of the state governments ultimately. The statement of vision said there would be development, including:

A range of sustainable forest based industries founded on excellence and innovation will be expanding to contribute further to regional and national economic and employment growth.

In relation to wood production and industry development, the statement said that the national goal was:

. . . for Australia to develop internationally competitive and ecologically sustainable wood production and wood products industries. Efficient industries based on maximising value adding opportunities and efficient use of wood resources will provide the basis for expansion in wood products manufacturing which in turn will provide national and regional economic benefits.

I very much agree with those objectives. Also, the national forest policy statement committed state governments on the issue of wood pricing and allocation by saying:

State governments will encourage the use of logs for their highest net value end use.

In terms of wood production and community service obligations, the statement said:

To effectively account for these different responsibilities, the costs of meeting community service obligations and commercial wood operations should be clearly separated and accurately reported. In this way, the governments and the community will be able to determine the commercial and community service performance of the forest services in accordance with the stated management objectives.

A very important part of the national forest policy statement was the plan to implement a wood and paper industry strategy. As part of that, the previous government and this government committed themselves to the setting up of a Wood and Paper Industry Council that would be representative of all stakeholders. It, in turn, would develop strategies, look at market opportunities for the forest industry and hopefully drive and head the industry towards having a stronger manufacturing base in this country. That would satisfy the intent of the national forest policy statement—that is, more economic and employment benefits for regional Australia.

I would just like to read a couple of letters. The first one is dated 17 July 1996 and is written by the Minister for Industry, Science and Tourism, Mr Moore, and addressed to Mr Trevor Smith, the national secretary of the Forest and Forest Products Division of the CFMEU. This letter is a response to a letter Mr Smith sent to the government about his concerns relating to the development and implementation of a wood and paper industry strategy. Mr Moore's letter says in part:

Thank you for your letter of 13 June 1996 concerning the implementation of the wood and paper industry strategy. The government has endorsed the strategy which includes a $38 million package to promote development of internationally competitive wood and paper industries based on ecological sustainable management practices. The strategy is complementary to the development of regional forest agreements and the forest industry structural adjustment package which will create resource security for the industry and facilitate restructuring. It will help to create a stable policy environment allowing industry to confidently plan and invest in value added activities. The government recognises the importance of effective communication between all stakeholders and to this end is currently reviewing the consultative arrangements covering the major forest issues. Details are expected to be finalised in the near future and, once the new arrangements are put in place, I am sure that they will ensure the wood and paper industry makes a significant contribution to the economic development of Australia.

Then there is a letter from the Department of the Prime Minister and Cabinet signed by Mr Phillip Glyde, the assistant secretary of the forests task force. Again, this letter is addressed to Mr Smith, the national secretary of the Forest and Forest Products Division of the CFMEU. The letter states:

Dear Trevor

Thank you for your letter of July 16, 1996, concerning stakeholder participation in progressing the comprehensive regional assessment process and the wood and paper industry strategy. The Commonwealth is committed to the effective involvement of key national stakeholders, including the CFMEU, in the implementation of the national forest policy statement and the wood paper industry strategy. Ministers are currently considering options to facilitate meaningful stakeholder involvement—

it is very important to note that—

I have forwarded your views to the ministers responsible for developing stakeholder participation mechanisms.

A letter dated 11 September 1996, again to Trevor Smith, states:

I am writing in relation to your appointment to the Wood and Paper Industry Council which was announced on 29 January 1996. The government has made a commitment to expedite the implementation of the national forest policy statement. The government has also endorsed the four-year wood and paper industry strategy as an important part of its forest policy objectives. Consultative arrangements in the forest industries and wood and paper sectors are currently subject to a comprehensive review and it is anticipated that new arrangements will soon be finalised. As part of this review—

this is the really surprising part—

the Wood and Paper Industry Council has been abolished.

The government made a very clear commitment prior to the election to continue to implement the national forest policy statement in accordance with the previous government's program. The letter continues:

I would like to thank you for your willingness to serve on this body and I hope the government will be able to call on your knowledge and expertise at another time.

There still has been no advancement with respect to the Wood and Paper Industry Council.

One of the principal reasons that I have moved this disallowance motion is that the government has failed to act. In recent supplementary estimates I asked some questions of the Department of Primary Industries and Energy with regard to the involvement of an industry development strategy and how it was being linked into or fed into the RFA, regional forest agreement, process. They were unable to explain that to me, yet they have principal responsibility for the development of regional forest agreements that have as a very important part of them an underlying commitment, indeed a principal commitment, to ensure that forest based resources are used in a way that will benefit employment and thus the community from both an economic and a social point of view.

We all know that around this country employment is significantly declining. In my own home state it is particularly difficult. We have the highest unemployment rate in Australia. In its forest based industry there are significant opportunities for the creation of jobs but, because no progress has been made and no initiative taken to develop a proper strategy, one that will lead to the creation of employment, the jobs in the industry continue to decline.

Just as an indication of some of the things that have happened, on a number of occasions in the Senate I have criticised not only aspects of the national forest policy statement and the progress of it but particularly certain companies which have come up with a plethora of proposals for downstream processing when they have applied for and been issued with woodchip export licences.

When Labor was last in government, in the issuing of licences some importance was placed on downstream processing and a commitment being given to downstream processing over the long term in either paper manufacturing or sawmilling and processing of timber. I criticised a number of companies but two in particular: North Forest Products and Boral. I made particular points about both of them but referred to Boral specifically.

I said some time ago in this place that that company had put up straw man proposals for $160 million worth of development. The company wrote to me after I made those statements in the Senate and accused me of being dishonest and said they were very committed to implementing those proposals. Indeed, they requested that I have a meeting with them so that they could explain to me exactly how committed they were.

We had the meeting, and I understood their concerns and they made their point. I indicated to them at the time that when I saw the first sod of soil turned I would accept their position but until that time I would continue to express my views and concerns in relation to companies coming to government and saying they are going to do this and that and then nothing happens. That has really been the history of companies seeking export licences. And, of course, what did Boral do just recently? They announced that they were scrapping the $160 million worth of proposals they had put forward.

I would now like to refer to a person who has sought to purchase resource from the Tasmanian Forestry Commission. He was going to proceed—indeed, he actually built one sawmill—and could have employed 35 people. But he was told by the commission that there was no resource. I have here a document dated 2 June 1994, a little while ago now, from the Tasmanian Forestry Commission relating to an assessment of wood—that is, logs—going to three woodchip mills. This person was seeking to purchase wood which has now become known as category 8 sawlogs. This document was signed by a Tasmanian Forestry Commission officer, and it says in part:

The assessments have been continued for the last six months with the following results—

and this is to identify what has become known as category 8 sawlogs—

Triabunna—13 per cent—

of the total volume going into that mill could meet the specifications for category 8 sawlogs.


which is another location for a woodchip mill—

10 per cent


which is a railway siding but a location for the dumping of logs that are then railed to the Longreach mill—

40 per cent

Forty per cent of the resource that was destined for the woodchip mill had been identi fied by the Forestry Commission as being suitable for processing further. But has it happened? No, not at all.

Senator Brown —Shayne, will you incorporate that letter?

Senator MURPHY —I may well seek to have that letter incorporated, Mr Acting Deputy President. I want to also refer to a letter of 5 May 1994 to a company called Asia Pacific Resources. The company had written to the Forestry Commission seeking to purchase category 2 sawlogs. The letter in response to that in part says:

Thank you for your letter of 20 April 1994, about crown category 2 eucalypt sawlog tenders. Your position with respect to category 2 sawlogs is acknowledged. However, you should be aware that the market for sawn timber has improved considerably and it is likely that all category 2 sawlogs offered in the recent tenders will be placed within the existing sawmilling industry.

The problem with that letter is that Forestry Tasmania, formerly the Forestry Commission of Tasmania, has never been able to tell even its own state parliament the amount of category 2 sawlogs that are produced. When the forest is harvested, the commission makes an assessment of the type of wood that will come out of the coupe. It will categorise the wood as category 1, category 2 and pulpwood. It has never been able to identify—which I believe is untrue—the volume of category 2 sawlogs. It says, `We sell some 50,000 cubic metres per annum,' but probably three or four times that amount is produced. Every state in Australia, bar Tasmania, has a capacity to identify those volumes.

The rule of thumb generally applied across this country in terms of cutting trees out of the bush is that with top grade sawlogs, being category 1 in Tasmania, the ratio for the next category down will be two for one. That is the accepted rule of thumb ratio—two for one. In Tasmania we cut approximately 300,000 cubic metres of category 1 sawlog. So one could say, `Even to be conservative, even if we say the ratio is one for one, we ought to produce around 300,000 cubic metres of category 2 sawlog.' But the Forestry Tasmania has never sold more than 80,000 cubic metres of category 2 sawlog—never.

In the state parliament, the commission went through a scrutiny process like our estimates process. When it was asked to identify the volume produced, it said, `We can't identify that because sometimes the specifications go up and sometimes they go down.'

Senator Kemp —Very repetitive, Shayne.

Senator MURPHY —Senator Kemp, you say it is very repetitive. You, as the Assistant Treasurer, ought to be very interested in generating jobs in regional Australia. I know that you are not, so it does not really matter. All of those things are then, I suppose, issues for debate; but they are the facts. We know in our own region of the world that, with regard to hardwood sawn timber products, there is a shortage. Indeed, I have the main findings of a most recent report prepared by Margules Groome Poyry for ABARE which looks at the Tasmanian forest industry growth potential to 2010 and 2020. This was part of the RFA process. With regard to hardwood sawn timber products, it says just these things. But we did not need this report, because there are any number of reports that will indicate the same thing.

Within the Asia-Pacific region, because of the overcutting of their hardwood forests, their exports will continue to decline and indeed they will become net importers of hardwood sawn timber products. We know there is a huge shortfall already. We have a real capacity to actually supply some of that market—maybe not a lot of it, but certainly we can supply a reasonable amount of it. That will in itself create many thousands of jobs in rural and regional Australia. So we ought to be trying to head the industry in a direction that at least, if we are going to have a forest industry and we are going to utilise resources from the forest, maximises the resources to the best of our ability and ensures that we deliver the best social outcome and the best economic outcome.

In closing, I got a letter from the country sawmillers in Tasmania today. They would be under more pressure than anyone else with regard to supporting me and a motion I moved to disallow regulations. The letter says:

I note your notice of motion to disallow Minister Anderson's regulations to remove all controls over woodchip exports. It would seem that we share a common point of view on this matter.

So they have a position. They are concerned about it because it does have a real potential impact on their future. For very good reasons, I urge senators to support the disallowance motion. (Time expired)