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Wednesday, 31 May 1972
Page: 2342

The PRESIDENT - Is leave granted?

Senator Cavanagh - No.

Senator COTTON - As Senator Cavanagh is not happy with that suggestion 1 am content to read the speech, particularly as it interests me greatly. This Bill provides for the continuation of financial assistance for a further 5 years from 1st July 1971 to the States by the Commonwealth, for the purpose of expanding the rate of softwood plantings and so assist in meeting our needs for forest products. As honourable senators are aware the States have for the past 5 years been assisted financially to the extent of $18m by the Commonwealth to expand softwood planting in accordance with the Sortwood Forestry Agreements Act 1967. The States have been enabled to increase the area of Government-owned softwood plantations from about 528,500 acres as at 31st March 1966 to 793,000 acres as at 31st March 1971. In addition the area of softwood plantation in the Australian Capital Territory and the Northern Territory increased from 27,959 acres to 36,546 acres during the same period.

The assistance provided by the Commonwealth to the States in the first programme was by way of long-term loan funds provided on very favourable terms. The funds, which are repayable over 25 years, are free of interest during the first 10 years after the date of each advance. Repayments, which are geared to the cash flow pattern of a forestry investment where there is no financial return until first thinnings, also commence 10 years after each advance. It is estimated that, during the second 5-year programme, the Commonwealth will make available some $21m to cover the proportion of State government planting that it has agreed to finance up until 30th June 1976. These loan funds will be provided on the same generous terms and conditions as for the first programme.

Honourable senators will be aware that the total level of planting programmed for the second 5-year period covered by this Bill is 273,400 acres, which compares favourably with the previous 5-year programme of 256,800 acres, although, by comparison with the last year of the first programme the annual rate of planting will be reduced from 58,500 acres to 54,680 acres. The area to be financed by the Commonwealth under the provisions of this Bill over the 5 years is 125,000 acres, compared with the total of 113,100 acres financed during the first agreement. The Government gave careful consideration to the level of planting in the second programme and decided that the total annual level of softwood planting should continue at about 75,000 acres. Of this total the State governments share would be 58,000 acres, the Department of the Interior in the Australian Capital Territory and Northern Territory some 2,000 to 3,000 acres, with private forests expected to contribute 15,000 acres.

The purpose of Commonwealth financial assistance is to enable the States to increase their rate of softwood plantings beyond what they could support from their own resources. The Commonwealth proposed initially that the States should finance 33,600 acres themselves and the Commonwealth provide financial assistance to plant 24,400 acres. This represented a modest growth in State-financed planting over the first agreement and seemed reasonable in the light of the continued expansion the States achieved on their own accord in years preceding the first agreement and of the increase in capital funds that have been made available to the States over recent years. However, following discussions with the States a base-year acreage of 29,680 acres was agreed to by the States and the Commonwealth raised its level of assistance to 25,000 acres.

I should point out that although the Commonwealth and States jointly decide upon both the total level of planting for the 5-year programme and its distribution between States, the distribution of planting within any State is a State responsibility. In making the offer to the States for the sec- ond programme the Commonwealth, in an effort to assist afforestation planning by the States, has agreed to consider the question of support for a further 5-year programme before the second programme terminates. Should the Commonwealth agree to finance a third 5-year programme, however, it could not be assumed that the present financial arrangements will be continued.

The agreement to be signed between the Commonwealth and the States containing the terms and conditions of the second programme, although similar to the first programme, has some important amendments which I would like to mention. These amendments result from experience gained during the operation of the first agreement. Firstly, the method of calculation of financial assistance due to a State in any one year has been changed thereby avoiding the problem which arose because the planting year in forestry differs from the financial year. It is hoped this will make the calculation of financial assistance more flexible in the new programme. Secondly, a provision has been included providing for the State to carry forward to this second agreement approved overplanting and under-planting that, as the case may be, was incurred by the individual States during the first agreement.

Thirdly, the agreement requires the States toseek approval to incorporate any above - or below - programmed plantings occurring in this second programme in the new assistance formula, within one year of the variation occurring. This is important to ensure that the level of annual plantings should be as close as possible to that programmed. It is a complex legal agreement and I consider these amendments will smooth out any of the administrative problems we became aware of in the first agreement as well as facilitate the transition from the first programme to the second.

Mr President,this scheme is one which has its genesis in the Australian Forestry Council. Although the scheme directly assists the States to increase their softwood resources, its final objective is to ensure timber is available for the forest industries based on these resources. It is estimated that in financial year 1970-71 Australian consumption of forest products was in excess of $900m and domestic production was $650m. This scheme will provide raw material for expansion and growth of Australian industry and it is hoped that this will enable large, efficient, integrated industries to be established. At the same time it will provide employment in the forest and in forest industries thereby stimulating employment opportunities in rural areas; it will complement our existing resources of native forests and enable a wide range of forest products to be available to the community and it will reduce our reliance on the import of forest products from overseas. The States are to be congratulated on their achievements in the first programme and the manner in which they undertook their task augurs well for a successful second programme. I commend the Bill to the Senate.

Debate (on motion by Senator Mulvihill) adjourned.

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