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Wednesday, 28 March 2001
Page: 25958

Mr LAURIE FERGUSON (11:17 AM) —The Primary Industries and Energy Research and Development Amendment Bill 2001 seeks to increase the Commonwealth's core funding to the Forest and Wood Products Research and Development Corporation with effect from 1 July. I indicate from the outset that the opposition will be supporting the legislation in line with our continuing commitment to a viable and forward-looking wood and paper industry.

As the actual provisions of the bill are straightforward, my contribution essentially will concentrate on the history, current functions and funding arrangements for the Forest and Wood Products Research and Development Corporation. The corporation is, in fact, a product of Labor's 1992 national forest policy statement, as was the wood and paper industry strategy of 1995, the national regional forest agreements process and plantations 2020—all of them have their genesis in the previous Labor government's activities.

That national forest policy statement set out an ambitious medium-term policy blueprint for the forestry industry, as agreed between the Commonwealth and all states and territories. It sought to address in a balanced way both industry development and conservation requirements and was jointly developed by the Australian Forestry Council, and the Australian and New Zealand Environment and Conservation Council in consultation with relevant stakeholders. I have to say—and I think the member for McMillan will be aware of this—that unfortunately over the past two to three years the industry has not been characterised by any endeavour at a federal level to cooperate with the various state governments around this country. The federal minister has essentially found himself in conflict not only with a variety of state Labor governments but also with the Western Australian and Victorian coalition governments on various occasions.

The final statement was signed by all the participating governments, with the exception of Tasmania, at the Council of Australian Governments meeting that was held in Perth in December 1992. Tasmania subsequently agreed to become a signatory on 12 April 1995. One of the 11 national goals of the NFPS concerned research and development. The goal of that element of the then NFPS was to increase Australia's national forest research and development effort and to ensure that this effort was well coordinated, efficiently undertaken and effectively applied. Section 4.10 of the NFPS went on to state:

An enhanced, better coordinated and better focussed research and development effort will be essential if the Governments' vision and goals for Australian forests and forest industries are to be achieved. Further research is needed in a number of broad subject areas: forest ecosystems and biological diversity; resource evaluation and inventory; the ecological and environmental impact of forest disturbance and management regimes; forest protection, covering disease, pests and fire; silvicultural techniques; forest productivity; wood processing and utilisation; product development; economic and marketing aspects; and other non-wood aspects of forests, such as wildfire management, recreation, and cultural and heritage values.

This overall research agenda was obviously ambitious and all-encompassing. The R&D section of the statement, on pages 33 and 34, went on to say:

The Commonwealth government, in partnership with the forest industries, will establish the Forest and Wood Products Research and Development Corporation, the charter of which will be to identify priorities and to commission, administer and subsequently evaluate research into a broad range of issues relating to wood production, extraction, processing, economics and marketing. Among these issues will be the impacts of disturbance resulting from wood production, silviculture, and management of native forests and plantations; the commercial and economic aspects of wood production; and research of relevance to the wood products industries. The new Corporation will be encouraged to ensure effective communication of research results to scientists, industry, land managers and the wider community through a scientific journal and more widely distributed magazines. It will also administer the Forestry Postgraduate Research Award Program.

The Commonwealth Government will support plantation research through the new Corporation. Research into commercial wood production on farms will be dealt with by the new Corporation in cooperation with the joint agroforestry research and development program developed by the Rural Industries Research and Development Corporation and the Land and Water Resources Research and Development Corporation. Where appropriate, the State Governments and industry will support this.

Subsequently, legislation in the form of amendments to the Primary Industries and Energy Research and Development Act 1989 was introduced by the former Labor government to establish the R&D corporation. Following the passage of this amending legislation, the corporation commenced operations in January 1994—just over seven years ago.

The charter of the R&D corporation is to invest in research for the forest and wood products industry and to facilitate the dissemination, adoption and commercialisation of the results of the R&D activities in which it invests. I stress that the corporation is essentially an investor in research and development. Unlike the CSIRO, the various cooperative research centres, universities and certain state forestry agencies, it is not an agency that conducts research and development. In its activities, the corporation seeks both to address market failure, in terms of the observed tendency for individual firms to underinvest in R&D activities—I think we are quite aware that over the last two to three years that reached crisis point, not only in forestry but in the broader Australian industry—and to promote the public good in terms of producing outcomes that benefit society as a whole. The corporation is based in Melbourne and has a small secretariat of six full-time staff who are answerable to a board of directors appointed by the Minister for Forestry and Conservation.

In its first seven years of operation, the corporation has been funded by a combination of means. Firstly, the timber industry contributes through a levy on unprocessed wood produced in Australia and a charge on all imports of unprocessed and certain primary processed wood products. According to the corporation's most recent annual report, these two industry levies totalled some $2.7 million in 1999-2000. To date, the Commonwealth's core funding has been on the base of $1 for every $2 of the industry levy payments. This approach was originally adopted because part of the forests and wood products industry was seen to be of a primary industry nature and part was viewed as essentially manufacturing. On the other hand, I acknowledge that the Commonwealth's contribution to all other research and development corporations established under the 1989 act was on a dollar for dollar basis.

During the consultation process for the government's forest and wood products industry action agenda, the industry lobbied for the Commonwealth contribution to be increased so that it was on a dollar for dollar basis. Following cabinet consideration on this action agenda, Minister Tuckey announced, on 5 September 2000, that the Commonwealth contribution would be calculated on a dollar for dollar basis with effect from 1 July this year. The bill that we are considering today seeks to give effect to that announcement. The exact budget impact of the proposed change in core Commonwealth funding will depend on the actual level of the industry levy payments in future years. This in turn depends on both the industry's volume of production on which the levy is based and on the rate of the levy applied to that production level. The government estimates that the likely level of additional government funding will be approximately $1.6 million a year.

I am happy to indicate the opposition's support for this modest but welcome increase in core funding. We do so because we are committed to a viable and productive wood and paper products industry and we recognise the importance of research and development in contributing to that objective. I note that we are also committed to continuing active involvement by the Commonwealth in forest policy and industry development.

In endorsing the increase in funding to the R&D corporation, I note that it has also been in receipt of significant amounts of other Commonwealth funding since its establishment. The most significant sources of this other funding have been project funding under Labor's wood and paper industry strategy—WAPIS—and under the farm forestry component of the government's Natural Heritage Trust. Over the two most recent financial years for which data is available to me, 1998-99 and 1999-2000, my office has calculated that WAPIS funding to the corporation totalled over $2½ million and NHT funding totalled $700,000. In other words, over those two years Commonwealth project funding exceeded $3.2 million, while Commonwealth core funding, linked to the industry levies, was just on $3 million.

Thus, in welcoming the increase in funding provided for in this bill, I stress that we should not overlook the importance of Commonwealth project funding to the corporation in recent years. Indeed, the opposition will be closely examining the forthcoming federal budget to see whether that level of project funding is likely to continue to be available to the corporation in the years ahead. Apart from the fact that the NHT has another year to run, until June 2002, to date there has been no indication to this effect from the government.

In concluding my contribution to the debate, I note that this measure constitutes the sole initiative—the Robinson Crusoe—thus far under Minister Tuckey's forest and wood products industry action agenda. It is much heralded and there is much rhetoric about it, but this is the sole financial contribution that we have had to it. I have referred on other occasions to the drawn-out, almost tortuous, nature of the action agenda process. The minister first announced his intention to develop an action agenda, with much fanfare, way back in December 1998; not 1999 or 2000, but 1998. At the time he promised everyone that the final strategy would be completed in June 1999. That is when it was going to be finished. That deadline passed without any sign of this so-called action agenda being ready. A further 17 months later, something happened—17 months after the schedule. Something happened, not 17 months after the original announcement but 17 months after the original supposed deadline.

After much toing-and-froing and sustained pressure from the opposition for the establishment of a proper industry council, the final version of the action agenda was eventually released by the government in November last year. What was originally supposed to take the minister only seven months to complete actually took him a full two years. Owing to the inactivity of the previous industry minister, who had said, `All of this industry assistance and industry development is a total waste of time,' I have to admit that the minister had a pretty difficult legacy when he took over the portfolio.

In the event, the action agenda did not set out a detailed funding strategy on the Commonwealth's behalf—unlike Labor's wood and paper industry strategy of 1995. In fact, Minister Tuckey's plan contained only one funding commitment, and that is the measure addressed in this bill. After two years plus, after the industry is expectant, waiting aghast for change, development and assistance, the only financial initiative is the one we have in this bill. This is sum toto, the end; that is the action agenda.

I recently received an answer from the minister to a question on notice seeking clarification of the funding for the action agenda. The minister's answer indicated that funding for other action agenda measures will be considered by cabinet as part of the 2001-02 budget process, taking into account the recommendations of his recently appointed advisory council. He has told us there is a commitment and he said it will be in the budget process, but I am afraid the track record is pretty sad. The level of inactivity in regard to industry assistance in this field is extremely abysmal, given the minister's rhetoric over the past two years about our trade deficit in wood and paper products, which, of course, as the Deputy Speaker and all those present will know, has severely worsened in the interim. Despite all the speeches, all the rhetoric and his professed commitment to the timber industry, the inactivity has got worse. I can promise the minister that the opposition will be closely examining the forthcoming budget to see just how much funding the coalition is willing to devote to its action agenda.

Fran Bailey —Does that mean you are going to pass it?

Mr LAURIE FERGUSON —The member opposite, who of course was a very prominent attendee at the TCA conference last month, stayed for quite a while compared to the minister. She would have noted the very strong message that the industry is now giving this government: they are sick of the name-calling; they are sick of the rhetoric; they are sick of the attacks and of the blues between state and federal governments; they do not want to hear from the federal government and federal members.

Fran Bailey —They want the RFA legislation passed and you know that.

Mr LAURIE FERGUSON —We will come to that in a second. They do. Very clearly they want the RFA legislation passed. The industry made it very clear to the minister that they just do not want to hear any more of this slagging off, these constant attacks on whoever he is fighting with, whether it is the Victorian Liberal minister, a Queensland Labor minister, Richard Court or the other Liberal ministers over there that held CALM before. They are sick and tired of it. They want industry assistance. They want money for exit from the industry. They want money for people to be retrained and to be given alternative employment. The industry made that very clear. They have made it clear to us as a party and as an opposition. They made it clear at their conference. They gave a message to Mr Tuckey in regard to the need for assistance.

Fran Bailey —Are you going to vote for it?

Mr LAURIE FERGUSON —The member opposite asks the Labor Party's view in regard to the RFA legislation. As I announced at that conference, in the aftermath of Western Australia, Labor's fundamental need to block this legislation has disappeared. It is very clear that our reasons for opposing this legislation have disappeared.

I hope that is a very firm message. I think the situation in WA was doubly sad because WA typified the kind of problems the minister is starting to now run into with his credibility. He knew quite clearly from day one that the WA coalition government could not sustain every job in the industry. Quite frankly, he can attack ex-Premier Court, he can attack the Leader of the National Party over there, he can attack half the Liberal Party in the state caucus, he can do a Katter all he wants, attacking his own party the whole time, but those people faced up to the realities, where he misled the industry. He misled the workers in WA, saying that it was sustainable. Quite frankly, the reality now is that the industry over there want federal assistance. They want help. They no longer want to hear attacks by Wilson Tuckey on a new state Labor administration or its Liberal predecessors.