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Wednesday, 13 March 2002
Page: 724

Senator BROWN (7:05 PM) —This amendment, on behalf of the Australian Greens, will ensure that there is parliamentary scrutiny of the regional forest agreements. Both the Labor Party and the government have said, `There are mechanisms for looking at the regional forest agreements and, when those agreements default in terms of management, employment commitments and the environment, the parliament will be able to look at it.' What both the Labor Party and the government do not say is that they will have no power to do anything about it. The whole thrust of this piece of legislation is to remove the current powers—and obligations which come with those powers—to manage, on behalf of the nation, and oversee the natural values of forests and to ensure that the states, which are getting more than $300 million out of national taxpayers to inject into the industry, expend that money judiciously and with good employment outcomes.

The evidence is clear that there has been job shedding on a very large scale, particularly in Senator O'Brien's home state, my home state of Tasmania. Despite repeated challenges to both the Labor Party and the government in here, this is not countermanded, because there is nothing to be said about it by Senator O'Brien on behalf of the Labor Party or by the government. Hundreds of jobs have been shed and hundreds of people have been sacked from the industry of native forest logging since Prime Minister Howard signed the agreement with the then Liberal Premier—which was taken up with even greater gusto by the now Labor Premier, Jim Bacon—in Tasmania, in which the Prime Minister said it would create 550 jobs and that, to that end, they would put $80 million for starters into the Tasmanian industry. In fact, a minimum of 450 jobs has been lost. Senator O'Brien is not going to deny that, the government is not going to deny that, yet we have this extraordinary situation where both of them will say, `We're doing this for jobs.'

Senator O'Brien has today said, `Well, we might get some veneer made. The Finns are looking at the whole logs we're exporting to Finland and, if they're impressed, they might come and set up a veneer plant in Tasmania using regrowth.' What Senator Murphy has had to say about that is enlightening: that it has been tried before—and it has—and the promise is always kept there, dangling in front, but it does not turn out. The idea that a use, such as veneer, has to be found for regrowth points to another major fault with the whole way the forests in Tasmania are being handled—that is, where are the sawlog forests for the future? Huge amounts of Tasmania have been planted with Eucalyptus nitens. I challenge either the government or the opposition to get up and say this is good sawlog timber. It is not; it is fast-growing, imported eucalypt from the mainland, which is for pulp.

It is not a sawlog driven strategy we have had in Tasmania; it is a pulp driven strategy—that is, a woodchip driven strategy— which denies and puts the lie to the idea this legislation is aimed at creating jobs, because the woodchip industry is a gross job shedder. That is why jobs have been lost since Prime Minister Howard made his hollow promise. The sawlog industry has been bypassed and, as we heard in that letter to Senator O'Brien from Mr Hayward from Wigeena earlier today, the fact is that over 90 per cent of the Tasmanian native forests is now being exported as woodchips rather than being utilised as sawlog. This is extraordinary because, in other countries, it would be the other way around: it would be 90 per cent going to sawlog and 10 per cent, as waste, going to woodchipping. This is a rampant misuse and waste of a once-only resource in the native forests of Tasmania. That is why Senator Murphy has felt impelled to take such a forward role in the debate—because he has been there at the coalface, he has represented the workers and he has seen the industry mismanagement with his own eyes.

We need parliamentary scrutiny for exactly the opposite reason to the one given by Senator Macdonald on behalf of the government. He says, `It is a democratic bill; it will take away mischievous government intervention.' What he means by that is that it will take away the ability of governments to act at all in the national interest. Acting on the environmental interests of the Australian people is seen by the minister and by the Howard government as mischievous, whereas we know, in effect, that the Australian people have moved well ahead of both the National Party and the Labor Party and want to see what is left of these grand forests and their wildlife protected because they are enormous job creators in terms of the attractiveness of those forests—both to Australians and to people from all around the world.

It is instructive to look at the financial performance of Forestry Tasmania because that brings into focus why there should be a national overview. Remember that Forestry Tasmania has been in receipt of enormous public largesse, including from the federal taxpayer. In 1988 it received $51.44 million as a result of the Helsham inquiry settlement, and that came out of taxpayers' pockets right around Australia. In 1990, the then Labor Premier, Michael Field, tragically transferred the accumulated $272 million debt of Forestry Tasmania into the public debt. In other words, he took it off Forestry Tasmania, which had been growing this debt—to use Treasurer Costello's new verbiage—and put it into the public debt where it could not be seen but where, since that year, it has been attracting interest-free payments and, therefore, has been taking millions of dollars out of schools, hospitals, police stations and other public amenities in Tasmania. Tens of millions of dollars have been lost because of Forestry Tasmania's debt.

Then, in 1997, after this regional forest agreement was signed by Prime Minister Howard, $110 million all up went into the Tasmanian industry—$64 million earmarked for Forestry Tasmania. In 1998, $52.197 million of capital and interest due on softwood loans from the Commonwealth was written off. If you put those together, you have well in excess of half a billion dollars going into the forest industry, and particularly Forestry Tasmania, out of the public purse in the last 14 years. Half a billion dollars in a little state like Tasmania!

It is worth noting that Forestry Tasmania's pre-tax operating profit is well below what would be expected in the private sector. It had a 1.1 per cent return on net assets in the last available year, 1999-2000. It would be more profitable to put the money that has gone to Forestry Tasmania into an interest bearing bank account. The pre-tax profit of Forestry Tasmania of $8.3 million in that year is even less than it first appears, because it includes interest income of $2.9 million from investments, including $71 million of the RFA money. A big component of the profit Forestry Tasmania can show is actually interest out of the taxpayers' money going through the RFA into Forestry Tasmania. It is not from the selling of the forests at all, because that is being subsidised. The people making the profit out of the forests are Gunns Pty Ltd. They have a 35 per cent return on their investment while Forestry Tasmania mismanages the public domain of the forests and, even worse, uses the largesse coming from here to falsely give the appearance that it is making a profit when it is not.

Forestry Tasmania's profit has fallen dramatically over the three financial years to 1999-2000, despite increasing wood volume sold. Operating expenses have risen faster than operating revenue, despite the higher wood volumes—most of which come from native forests. It is just not possible to work out which components of operating expenses are blowing out, because the annual report does not give that breakdown. However, the recent borrowing of $14 million by Forestry Tasmania dramatically exceeds the amount borrowed over the last few years. I ask the minister, as surveillance now, not some delegated committee further down the line: why are the profits in Tasmania falling while the amount of wood cut and processed is increasing? Why are the returns so low on that asset? Why are the operating costs blowing out? What has happened to the public money? What is the pre-tax profit for this year estimated to be? Why did Forestry Tasmania have to borrow $14 million in the last year when it had only so recently received $110 million, or at least $64 million of the $110 million, from Tasmanian taxpayers? What is going on?

I will return to this matter tomorrow, because when you look at Forestry Tasmania's so-called `profit', you find that it has been falsely aggregated by a reassessment of the value of the standing forests in Tasmania. From year to year they say, `The value of the forests has gone up by X million dollars. That is profit.' It is a very false accounting trick. If you take that out, Forestry Tasmania is running at a very great loss—despite the millions being injected into it by the public purse. Meanwhile, up the road in the private sector, Gunns Pty Ltd is making a killing through exporting the forests to the Japanese woodchip market at a huge windfall profit to itself because its infrastructure is paid for through Forestry Tasmania by the public. The other thing that Gunns Pty Ltd is so good at doing to enhance its profit line is sacking its workers. Where is the CFMEU and where is the Labor Party when that happens? They are silent.