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Paid out, but logged in   HANNAH MARTIN   |  June 19, 2011 12.01am

UP to a third of the Tasmanian forest contractors who received taxpayer-funded payouts to wind up their businesses are believed to be still working in the industry.

Industry insiders say the $17 million federal package used to encourage the operators to “address an overcapacity in the harvest and haulage sector” has failed to achieve its core goals.

They point to funding recipients still struggling financially, working in the industry interstate and working for locally based operators as they may be entitled to do under the package’s terms.

Robert Eastment, a professional economist and forester who runs the market advisory firm IndustryEdge, told the Sunday Tasmanian that about a third of the contractors who had received funding through the program continued to work in the native forest harvest and haulage sector.

“I’d say that probably two-thirds have been able to use that [money] to genuinely walk away,” Mr Eastment said. “Others didn’t receive enough to do it.”

He said many contractors who received payouts continued to struggle financially.

“In most cases it’s just been sufficient to get the banks off their backs,” he said.

More than 80 contractors applied for funding under the Tasmanian Forest Contractors Exit Assistance Program, with 30 sharing in the $17 million funding pool. The highest payouts were $825,000.

The funding was paid in two parts, with recipients receiving 75 per cent of their payment upon signing an agreement to wind up their business.

The final 25 per cent would be paid once proof could be provided that all employee entitlements had been made, along with proof of sale or evidence that any machinery owned by the business would not be used in the state’s native forest harvest and haulage sector.

The program was run by the Federal Government’s Department of Agriculture, Fisheries and Forestry, which has admitted that some funding recipients are under investigation for fraud.

Greens MHA Kim Booth told the Sunday Tasmanian the Federal Government would have to provide up to $60 million for a second round of funding.

He said failings in the present scheme had simply compounded problems in the industry.

Contractors who dipped out on funding and were trying to exit the industry under their own steam couldn’t sell their machinery for its proper value because the market was flooded with gear being sold by people who received payouts and were willing to accept lower prices.

Mr Booth said some contractors had simply “changed the name on the door of their trucks”, while others were working for contractors who did not receive funding.

Some had moved their trucks and equipment to the mainland to work in interstate forests. Mr Booth said any new funding should be offered under stricter terms that guaranteed recipients left the industry for good.

Mr Eastment supported calls for the Federal Government to cough up more funding.

“It just has to be run effectively and it has to be given to people who genuinely want to leave the industry and don’t really have the opportunity to leave without fear of losing their home and things,” he said.

A forestry department spokeswoman defended the scheme, despite acknowledging widespread allegations of fraud. She said investigations into some recipients of the funding were ongoing.

“The fraud unit has completed its investigation into the majority of the allegations received,” she said.

“It is not appropriate to comment on specific cases. However to date no matters have been referred to authorities for further investigation.”

She said DAFF would continue to investigate any new information or allegations.

However she defended the overall results.

“This program aimed to address an overcapacity of harvest and haulage contractors in the Tasmanian native forests specifically and targeted the removal of businesses operating in this sector,” she said.

“Under the program contractors are not prevented from operating their businesses or finding work in the native forest industry in mainland states or in the plantation sector nationally.

“Contractors are also able to seek work as an employee of any other company within Tasmania.”

Read the full Sunday Tasmanian story HERE

Loggers paid exit money find fresh coupes

Green groups are angry that logging contractors paid money to exit the Tasmanian industry are free to continue harvesting native forests in other states.

The revelation has angered environmental groups.

The $17 million Federal Government exit program was designed to reduce overcapacity in Tasmania’s native forest harvest and haulage sector.

Lisa Stone from the group South East Forest Rescue says she was shocked to discover a Tasmanian logging company that accepted an $850,000 exit grant, is now harvesting native timber in southern New South Wales.

“I was absolutely gutted,” she said.

“Tasmanian forests are being destroyed as we speak; native forests, high conservation value forests and then to have this company here in our state having said they would exit native logging, it’s almost incredible,” she said.

Tasmania’s Forest Contractors’ Association is standing by members who move interstate after receiving exit money.

The association’s Ed Vincent says the assistance package only required contractors to exit native forest logging in Tasmania, not elsewhere.

He says the money did not go far enough and contractors can not sell their equipment in the current market.

“People need to be able to actually survive financially and for some of them a move to a different state, as difficult as that is with the very high costs of relocating, is the only option that was available to them,” he said.

A spokesperson from the Federal Forestry Department says grant guidelines do not stop recipients moving interstate to work in native forests.