Senator TROETH (Parliamentary Secretary to the Minister for Agriculture, Fisheries and Forestry) (12:57 PM) —I would like to thank the Labor Party for their support of this legislation and to make some summing up remarks. As has been pointed out, the purpose of this bill is to remove an anomaly that has existed in the Primary Industries and Energy Research and Development Act 1989 since 1994. That anomaly meant that the Commonwealth matched industry contributions for forest research and development at half the rate at which it matches levy contributions from all other primary industries. The bill repeals two clauses in the act that specify a special funding arrangement for forest research and development from the Commonwealth at one dollar from the Commonwealth for every two dollars from industry up to a maximum of 0.25 per cent of gross value of production.

The effect of this bill is to provide, from July 2001, government funding to the Forest and Wood Products Research and Development Corporation at the same rate as is provided to other research and development corporations under the act—that is, dollar for dollar matching of industry levy contributions up to a maximum of 0.5 per cent of gross value for production. The Commonwealth is effectively doubling its contribution to the forest industry. The forest and wood products industry contributes about one per cent to Australia's gross domestic product. It employs some 80,000 people directly and a further 194,000 people indirectly. Its activities are focused in regional Australia. The forest and wood products sector plays a crucial role in the economic and social health of rural and regional Australia.

In 1999-2000, Australia imported $3.8 billion worth of forest and wood products, mainly paper and high value products, and we exported $1.6 billion worth of products, mainly woodchips and round wood. With our extensive forest resources there is tremendous potential to export a range of high value products and progressively reverse the current imbalance of trade in forest and wood products. World demand for forest and wood products continues to grow, particularly in the Asia-Pacific region.

By increasing the Commonwealth government's contribution to forest research and development, the bill provides a much more secure footing for continuing investment in national and strategic research and development into resource management, production, processing, transport, marketing and usage of forest and wood products. This R&D is vital if the industry is to take full advantage of emerging opportunities to add value to our native timber resources and develop new opportunities for our expanding plantation base. The bill is one of a series of actions undertaken by this government to support a sustainable, competitive and innovative forest and wood products industry in Australia. I commend the bill to the Senate.

Question resolved in the affirmative.

Bill read a second time.