Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Tuesday, 15 October 2002
Page: 5221

Senator Brown asked the Minister for Forestry and Conservation, upon notice, on 21 August 2002:

(1) Who prepared the 1997 projections for plantation wood supply.

(2) What new information has, or what new assumptions have, become available in 2002 leading to a 20 per cent upward revision in projected plantation wood availability from 2006.

(3) (a) In the 1997 projections, what volume of softwood plantation wood was projected to be available for the 2006-10 period; (b) what volume is now projected to be available for the same period; (c) what are the confidence limits of each set of projects; and (d) how does the Minister explain the revised projections, given that the softwood plantations to which they refer generally have growing times of 30 or more years (in other words, they were already 20 years old when the 1997 supply estimates were prepared).

(4) (a) Were the revised projections available before 30 June 2002; (b) why were they not released publicly until August 2002; and (c) how does the Minister expect the revised projections to affect plantation investment and wood prices.

(5) Using the new projections, what proportion of Australia's wood consumption can be met from plantations from 2006-10.

(6) Does the Minister agree that competition from other nations such as Argentina, New Zealand, Chile and South Africa will make it difficult for Australian producers to export the impending surplus of plantation wood.

(7) What would be the benefits for Australia's plantation-based industry if old-growth and high conservation value native forests were protected from logging, under the new supply projections.

(8) Is Australia facing a wood glut.

(9) (a) What is the justification for continued tax and other incentives to expand Australia's plantation estate; and (b) what is their annual cost.

Senator Ian Macdonald (Minister for Forestry and Conservation) —The answer to the honourable senator's question is as follows:

Senator Brown's question on notice was made with reference to:

Yainshet, A., Nelson, R. and Love, G. 2002. Rising domestic plantation wood supplies. ABARE Current Issues 02.7, August.

(1) The 1997 projections for plantation wood supply were prepared by:

Turner, B. and James, J., 1997. Forecasting of wood flows from Australia's plantations - a report to the 1997 National Plantation Inventory. Bureau of Resource Sciences, Canberra.

(2) New information used in the ABARE Current Issues 02.7 report, August 2002, was drawn from Ferguson, I.S., Fox, J., Baker, T., Stackpole, D. and Wild, I. 2002, Plantations of Australia - Wood Availability 2001-2044. Consultant's Report for National Forest Inventory, Bureau of Rural Sciences, Canberra. 108pp - a companion to the Plantations of Australia 2001 report by the National Plantation Inventory (NPI). New information used in the BRS consultant's Report was collected by the NPI grower census and represents the most accurate data on area, species, age and ownership of the estate up to 2000. It incorporated data on the rapid expansion of hardwood eucalypt plantations since 1994 and revised yield models that take account of empirical growth rates experienced over the last ten years. The report also explicitly accounts for plantation expansion after 2000 using two planting scenarios- `no new planting' and a `new planting' scenario that uses recent forecasts to 2019 developed by the Bureau of Rural Sciences. Therefore, while there are many parallels between the 1997 and 2002 reports, the new report is based on improved information and refined assumptions.

(3) (a) In the 1997 report, the volume of softwood plantation wood (all products) projected for the 2005-09 period was 12.6 million cubic metres per year. (b) In the 2002 report, the volume of softwood plantation wood (all products) projected for the 2005-09 period was 15 million cubic metres per year. (c) The regional forecasts were classified into three reliability classes based on the proportion of grower provided estimates, which were afforded a higher degree of reliability.

The `no planting' scenario was based on accurate information on existing plantations, the forecasts represent a lower level of availability with a high degree of confidence.

The `new planting' scenario involves forecasts of future expansion and represent higher levels of wood availability with a lower level of confidence.

Further information on these aspects and comparisons with other projections can be found in the report.

(d) The difference between the 1997 and 2002 projections are explained by improvements in method. The 2002 projections are based on new much more detailed regional information gathered through a census of growers conducted for the National Plantation Inventory that was not available when the 1997 estimates were prepared.

(4) (a) No. The data reported in the BRS consultant's Report were under embargo until their release by me at the Future Prospects for Australian Plantations conference on August 20, 2002, in Canberra. (b) The BRS consultants report was still being revised up until the point of publication. (c) Changes in Australia's wood production or projections thereof, have little to no impact on final wood product prices which are determined, over the medium and long term, by supply and demand on the larger world market. Australia remains a small producer unable to influence medium and long term world prices. As investment will also be driven mainly by world price outcomes over the long term, it is unlikely that it will be affected by changes in Australia's wood production projections.

(5) Sawnwood: These projections imply that by 2006-10 softwood plantation product would equal around 85 per cent of Australian consumption of sawntimber.

Pulpwood: Australia could meet all of its domestic consumption of pulpwood from plantations.

(6) Australia is already competing in a competitive world market and this is expected to continue.

(7) There is no soundly based evidence to suggest that reducing the availability of timber from native forests would change returns to the plantation industry.

(8) The prospect of a wood glut in Australia is unlikely. As in many of Australia's primary industries, there is capacity in Australia's plantation wood industry to improve productivity to better compete on export markets.

(9) (a) I refer the Senator to my press release of 21 February and 21 March of this year.

This Government is creating the framework necessary to support an internationally competitive and sustainably managed forest industry, and has concentrated on removing impediments which discriminate against forestry when compared to other agricultural activities.

The Taxation Laws Amendment Act (No. 1) 2002 does not provide incentives to expand Australia's plantation estate, rather it was introduced to promote certainty and improve investor confidence in Australia's plantation forestry sector.

(b) I refer the Senator to the Taxation Laws Amendment Act (No. 1) 2002 Explanatory Memorandum, in which the financial impact of these measures were assessed by Treasury.