It seems that with the issue of Forestry, no-one has really put their finger on the problem. Neither Forestry themselves, the government, the accountants and Treasury nor do their critics approach this from the correct angle.
As it stands, Forestry is a dinosaur that stubbornly refuses to move out of the Jurassic swamp.
The basic root of the problem is that this is an industry driven by the production of waste! They themselves classify between 73% and 95% of their output as waste, which they then burn or chip. Even their prime product, sawlogs, also has a 40% waste factor built into it.
Because this is seen as a ‘free’ resource, no proper cost is attributed to it, and therein lies the problem.
Which other industry anywhere in the world is driven to produce this quantity of waste from their prime operating material? Which other company spends an equal amount of money by volume to produce a waste product, and then sells it at waste product prices below cost, but fails to add this difference to the price of the prime product? The actual cost of producing chip wood and burnt material is the same as their prime products, but the price they sell their prime product for does not incorporate this 73% -95% cost of their operation. If it did, then no-one would be able to afford it, but this is the reality!
Although still classified as waste, the demand for this under-priced product rose steadily over the years since the advent of clearfelling and became the main product of Forestry, supplying to the likes of Gunns etc. Sawlogs became the secondary product, amounting to less the 10% of production and with speciality timbers amounting to a mere 0.01% of output. Yet they continued to tell us this was the raison d’etre for their existence and methods. As previously stated, the cost of producing this ‘waste’ material was exactly the same as for the so-called prime product, but the price did not reflect this, and in its heyday, chip mill owners capitalised on this and made huge private profits, leaving the taxpayer to fund the incompetence of the public trustee who produced this waste.
Later, when this industry collapsed, due to the waking up of the world and when they realised that the world’s forests were disappearing in to the maw of corporate business, the pressure was on to stop this practice. Of course, highly opposed by all level of participants, but the one thing they absolutely refused to do is to change their methods as far as the forests were concerned. They tried to get in on the act by becoming involved in plantations, but in the case of Tasmanian Forestry it has managed to produce the most expensive plantations in the entire world – but as usual, funded by the taxpayer.
Meanwhile, to hide all this from public view, Forestry has employed devious methods, such as not revealing their accounts, falsely ascribing items and refusing to say what deals they have actually made with their various customers claiming ‘commercial-in-confidence’ privileges.
A small example of false accounting is that they claim their roading as assets in the annual accounts, thus offsetting some to their losses. Roads are actually a cost associated with extracting the material. After they have finished this operation and replanting etc, these roads have no further use for another 90(?) years and if they are maintained, accrue further costs. They are certainly not valuable assets as they take no further part in generating income. The cost of constructing them should be added as part of the cost and price of the material extracted, but it is not.
However, they refuse to acknowledge in all this that it is our money and assets they are dealing with, our forests, and they are supposed to be trustees for us. Yet it is we who are not informed, expected to pay for their perpetual incompetence and get locked out of these forests on the whim of the trustees and we are never consulted on a formal basis before they decide to slaughter our iconic areas. When there are objections and objectors, the police are used as a private army to protect them against the owners of this resource whose purpose is to ensure that their practice of destruction ceases or is modified.
So far, over the last decade, the cost to the public has been over One Billion Dollars! And that does not include subsidies to the main processors either. This is the real measure of the inbuilt inefficiencies of Forestry and their buddies. They should have returned a profit!
Neither have they changed their approach now that the world has woken up to the fact that most of what they produce is classified as waste and that deforestation has become a major concern of the world. Instead, the dinosaur digs itself deeper into the swamp and tries to cling to its out-dated and inefficient lifestyle of slash and burn. And of course, they always blame someone else for their incompetence. The sooner it drowns in this morass the better, then we may stand a chance of acquiring a more enlightened approach to conserving and using our natural bounty – an alien concept that seems beyond the competence and understanding of our current industry and leaders.