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Thursday, 18 November 1993
Page: 3115


Senator COULTER (12.17 p.m.) —It will not be surprising that I will be making remarks which are complementary to those of Senator Spindler, particularly his earlier remarks on the need for a comprehensive and total overview of both the economic and the social management of the country. For too long it seems that we have taken an ideological position—an economic rationalist position—in relation to industries, industry by industry, and have ignored some of the wider implications of those decisions. For example, we have often destroyed industries which has led to unemployment. While the cost of that unemployment does not appear against the budget of the particular industry, it nonetheless shows up somewhere else in the overall Australian economic assessment. If those people appear on the dole then there are very significant implications, both social and economic, associated with that even though the industry itself may, in a narrow sense, be made to look more economic as a consequence of those decisions.

  The area I particularly want to dwell on today is the forestry area. I think this is an example, par excellence, in which the management by state governments over many decades has meant that essentially there has been a very substantial state subsidy of forestry. Not only are we seeing enormous environmental damage and destruction of old-growth forests; not only are we seeing extinction of species in these forests; we are also actually paying the forestry industry to cut our forests down and, in many cases, to cart those trees away as woodchips for export to other countries. We are actually paying for this destruction to occur. The activities in the forests are not, as one would be led to believe, economically propitious and economically advantageous to this country. In fact, they are economically damaging. So, in addition to the environmental damage, we have an economic damage. Taxpayers are actually subsidising the damage which is going on.

  Quite recently, the Federal Government, together with the states, entered into what is known as the national forest policy statement. That policy was signed last year by the Commonwealth and by all the state governments with the exception of Tasmania. The policy requires that state forest agencies avoid activities that significantly harm areas of old-growth forest and areas of wilderness value or high conservation value. The reality is that the state forest agencies in New South Wales, Victoria, Western Australia and Queensland are logging at this very instant areas of high conservation value, in total violation of that policy. Areas of world conservation value are right at this instant being logged in Tasmania. Areas of the National Estate—part of our natural heritage, part of our national heritage—are being razed right at this minute. The Commonwealth, as a signatory to that policy and as the body that should be a leader in environmental matters, must act to stop this crime against the environment and against future generations.

  Over and above that aspect, I want to concentrate today, since we are talking about appropriations, on the economic damage that is being done to Australia, because we are paying for this damage to occur. It is not as though we are getting an economic benefit against an environmental damage. We are getting both economic damage and environmental damage as a consequence of this forestry. The logging of these old-growth forests is a debt-making process; it is not a benefit. Taxpayers are actually paying state governments to destroy our natural heritage.

  Conservation groups have pointed to this situation for years, yet governments have refused to listen, despite the fact that many of the investigations that governments themselves have carried out have produced this evidence. So it is not just a matter of evidence from the environment and conservation groups, groups that may be regarded as having a particular view; there are many government-initiated reports that establish exactly the same situation. For instance, the Resource Assessment Commission said in its forest and timber inquiry final report that in all states, with the exception of South Australia, there were negative net revenues for the period 1927 to 1989. The 62-year time frame is important because of the long periods between logging and the necessity to rotate the old-growth forests into new plantations. One does not replace overnight a 400- or 500-year-old forest.

  The figures indicate that the debts run up by state forestry are as follows: Queensland, $1.536 billion—we are talking about very large amounts here; Victoria, $1.086 billion—these are debts that have been incurred over that time by state forestry; New South Wales—again, there is the independent report in New South Wales—$1.033 billion; Tasmania—in terms of per capita debt a very small state but a very large debt—$520 million; and Western Australia, $443 million. In other words, an enormous debt has been built up over years because forestry has simply not paid its way. We have been paying for our forests to be carted away as woodchips and exported to other countries.

  The Resource Assessment Commission forest and timber inquiry report stated that in 1989 alone Victoria's forest service made a loss of $40 million: $40 million of taxpayers' money was paid to the forestry industry to cart our timber and woodchips away. In May of this year the Victorian Auditor-General's Office released a special report on Victoria's timber industry strategy. The report stated that in 1990-91, in the case of hardwood operations, there was a loss of $13.2 million. The report said that the department was unable to refute claims made by conservation groups that the industry is heavily subsidised by the Victorian public.

  What is happening is that the infrastructure costs associated with forestry—the building of roads, the repair of soil, replanting—are being borne by the public while the private industry is taking the timber away. In New South Wales in 1990 the Public Accounts Committee released a report on the New South Wales Forestry Commission. It stated:

The entire timber industry in New South Wales revolves around a system of substantial public subsidies.

If we want to get the economy of this country onto a proper footing, we should at least be recognising that industries that rely on such substantial public subsidies should not be allowed to continue. The committee reported that in 1989-90 the commission subsidised the forestry industry to the tune of $16.2 million—a $16.2 million subsidy in just a single year.

  The economics of the native forest hardwood industry simply do not stack up. The industry survives on government subsidisation. No other industry in Australia is subjected to the same degree of protection or privilege, except perhaps in the case of the nuclear industry, and we have seen recent examples of this in relation to the amount of money soaked up by ANSTO. The debt is created by state governments' willingness to underprice the eucalypt logs and to bear the full costs of much of the infrastructure, such as road construction, maintenance of roads, soil reclamation, and so on.

  The industry still requires substantial reform. Governments must stop the uneconomic and environmentally disastrous activity of old growth forest logging. It is illuminating to note that South Australia is the only state that operates at a profit in terms of forestry, and the South Australian timber industry has relied on plantation timbers for many decades. The royalties charged by the South Australian government internalise the costs of government-supplied services, such as road construction and so on. In the other states, royalty charges do not meet the costs of government subsidies to the forestry industry. In Tasmania, the Forestry Commission has this year lowered its royalty charges even further. This will create an even larger debt.

  Why should we continue to carry on an activity which is not only environmentally destructive but where we pay for that destruction to occur? It is not as though we are getting a benefit from this destruction. The extraction quota for sawlogs in Tasmania is 743,000 cubic metres per annum. The export quota for Tasmanian woodchips is 2.889 million tonnes per annum—an enormous amount of destruction for which the taxpayer, in Tasmania and generally, has to pay. That enormous destruction of our forests has to be subsidised.

  A few weeks ago the Minister for Resources, Michael Lee, gave in-principle support to the construction of a mill at Hampshire in Tasmania. The minister said that the mill would derive 85 per cent of its feedstock from plantations. However, what the minister did not say was that this was a target and that in order to met that target the forestry industry would clear large tracts of old-growth forest to pave the way for the plantation estates. So the initial situation is certainly not that 85 per cent of the feedstock for that mill will come from plantations; far from it. In the early years a large proportion will come from the clearing of old-growth forests. Only subsequently will those areas be replanted and become plantation estates.

  What we are seeing in Tasmania, as in the other states, is logging at unprecedented scales being paid for by the taxpayer. It is not a profitable industry. It is not an industry that should continue to attract subsidy. The forest sector trade deficit is $1.6 billion. This is a national disgrace. Despite over 50 inquiries, many environmental impact assessments and countless blockades, the forestry industry is still in a mess, both environmentally and economically.

  The federal government has to take its environmental and economic responsibilities seriously. It must ensure that state forest agencies internalise all their costs, appropriately price sawlogs and pulp logs, and stop logging old-growth forest and wilderness areas. It is fundamental to the whole idea of market economics that proper costs are represented in prices, something with which I am sure Senator McGauran would agree. If that internalisation were to occur, that action in itself would stop a great deal of the logging of old-growth forests. As I have indicated throughout this speech, there are enormous subsidies going into the logging of old-growth forests, into the damage that is occurring to our forest environment.

  The proper pricing of sawlogs and pulp logs would see much of the industry move out of native forest logging as it would simply not be economic to do that. It appears to be economic only because of the enormous subsidies that are given to forestry. The sustainable way forward—this government has committed itself to sustainability—is to fast-track the development of plantations on cleared agricultural land and for the federal government to ensure that it takes the lead and enforces its own agreed national forest policy to protect Australia's natural heritage.