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Forestry chief Bob Gordon and Deputy Premier Bryan Green

Read the report: HERE

• Earlier John Lawrence analysis on Tasmanian Times:
Dr Amos, it’s just plain nonsense
All John Lawrence analysis, HERE

Today’s review of Forestry Tasmania confirms the government enterprise is a failed business enterprise and shows viable overseas markets for pulp wood have dried up as the Greens predicted back in the early 1990s, Australian Greens Acting Leader Christine Milne said today (Friday).

“The URS–Deloitte report clearly shows there are no viable overseas markets for native forest woodchips or pulp logs. China is volatile and will only buy the pulp wood at extremely low prices.

“We will be paying the Chinese to take the forests away if we go down that path.

“The report also shows Forestry Tasmania lost $8.8 million and $9.2 million in the past two financial years, confirming that Forestry Tasmania is sucking millions of dollars out of the state budget which is money that could be spent on hospitals and schools.

“If it was a private business, Forestry Tasmania would have been in receivership years ago.

“The report has considerable ramifications for the forests intergovernmental agreement and the federal government should demand the state government dismantles the failed enterprise,” Senator Milne said.

• What Lara says:

Lara Giddings, MP

Premier

Friday, 3 February 2012

URS strategic review confirms market challenges


The Premier, Lara Giddings, today released the market analysis prepared as part of the first stage of the URS strategic review of Forestry Tasmania, which details the significant challenges confronting the forestry industry.


Ms Giddings said the report presented an independent and comprehensive picture of market forces and the effect they have had on the state-owned forestry company and the industry as a whole.


“World leading forest industry analysts URS have detailed knowledge of what is occurring in international markets,” Ms Giddings said.


“This report confirms what foresters are feeling on the ground and what we have been saying for some time: the forest industry is changing, we need to adapt in order to survive.”


The report found factors contributing to the current challenges include:


-    Significant contraction of traditional Japanese woodchip markets and stronger preference for plantation resource;

-    Reduced prices in Chinese woodchip markets in comparison to Japan;

-    The high Australian dollar weakening export competiveness;

-    Cheaper competition from plantations in Thailand, Vietnam and South America;

-    The exit of Gunns Limited from native forests.


“While there are still markets for Tasmanian woodchips, and we need to continue to sell residues to keep sawmills viable, the fact is our competiveness is being eroded by factors such as the high Australian dollar which is not likely to abate in the foreseeable future.


“While some of the factors affecting the industry may only be temporary, with the prospect that prices and demand from China will increase over the next five years, the industry still needs to respond to see out these challenging times.


“It is clear from this report that the Intergovernmental Agreement on Forestry is not the cause of the problems in our forest industry.


“To the contrary, the $276 million IGA gives us the best possible chance of managing the transition and retaining a long-term sustainable industry in Tasmania.


“This blows out of the water the Liberals Opposition’s claims that the industry can go back to the way it was, simply by tearing up the IGA.


“The Liberals have no credible plan, they have no funding and they have no grasp of the reality of what is occurring.


“This was demonstrated in Will Hodgman invitation for me to join him on a trade mission to Japan, where he said environmental campaigns were the sole reason for a decline in demand for Tasmanian woodchips.


“While there is no doubt that has been a factor, he would do well to read this report to avail himself of the full facts.”


Ms Giddings said the URS review would help inform Government decision-making about the future structure of Forestry Tasmania.


“While this report makes it clear that change is occurring, it does provide hope for the future of the forest industry, provided we recognise change and adapt accordingly.


“I would like to recognise the work the Forestry Tasmania has already done in their Innovations Plan to identify new opportunities for the industry.


“The Tasmanian Government sees a strong future for the forestry industry, one which draws on our natural advantages and harnesses the skills innovation of Tasmanian workers.


“The report notes that demand for higher value sawn timber products and speciality timbers is likely to grow nationally.


“It provides direction for a transformed forest industry that relies more heavily on manufactured timber products using the increasing volumes of regrowth and plantation timber already growing in Tasmanian forests.


“The IGA allows us to move towards this future, while providing $120 million to support new industries and grow jobs in regional areas affected by the forest industry transition.”


• What Nick says:

URS REPORT EXPOSES NEED FOR FORESTRY TASMANIA TO BE ABOLISHED
Forests and Land Must Come Under Government Control

Nick McKim MP
Greens Leader
Friday, 3 February 2012

The Tasmanian Greens responded to the release of the URS Strategic Review of Forestry Tasmania Stage 1 Report, describing it as the death-knell for Forestry Tasmania.

Greens Leader Nick McKim MP said that it is now clear that the public forests and land, including reserves, currently managed by Forestry Tasmania should be transferred to government departments under direct Ministerial control, with FT abolished.

“The report makes it clear that Forestry Tasmania is financially unviable, and cannot meet its obligations under the Government Business Enterprise Act. It is time for this rogue agency, which is currently working to undermine conservation outcomes in the IGA, to be abolished.”

“The Report makes it clear that Forestry Tasmania cannot survive in its current form, and that business as usual is not an option.”

Mr McKim also said that massive financial subsidies to Forestry Tasmania have been allowed to impact on core Tasmanian services like health and education for far too long, and it cannot be allowed to continue.

“Despite hundreds of millions of taxpayers’ dollars disappearing into the forestry black-hole over the last decade the current situation, as stated in this Report is that, ‘the recent poor financial results mean that under current policy settings, Forestry Tasmania is unable to fulfil its obligations under the Government Business Enterprises Act 1995, to operate as a successful business’.”
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“The forest industry is in the mess that it is in because Forestry Tasmania, cheered on by Labor and Liberal, have been interfering in the market, overcutting the resource, and spending taxpayer’s money to prop up an unsustainable business model.”

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Bryan Green (Pic from the government website)

The Wilderness Society today called on Forest Minister Bryan Green to ensure his trade mission to Asia takes a long term view on the urgent need for industry restructure and explores new markets for timber products made from existing Tasmanian plantations.

Wilderness Society spokesperson Vica Bayley said that locking in new contracts for native forest products would undermine this restructure and represent yet another stop-gap fix for an industry looking for reform.

“Crisis driven trade-missions to lock in a short-term native forest fix have been a hallmark of the government response to the industry downturn for many years,” said Mr Bayley.

“This trip would be total waste unless Minister Green takes a long-term view and explores options for plantation products that can be made from our existing plantation base.”

“Taxpayers have repeatedly funded mercy missions to seek new markets for native forests products, yet those markets have moved on to demand certified, plantation grown wood products.”

Mr Bayley added that an obvious Government response to the current crisis in the native forest sector was to bring forward the exit assistance for sawmillers and get the process of industry restructure going.

“This crisis is a result of a flawed economic model. The Governments’ agreement recognises that sawmillers will have an opportunity to exit the industry, and this is a critical mechanism that can reduce pressure on the industry and reduce logging in forests that need to be protected.”

“Protecting identified forests is a key pillar of the Agreement that can assist the industry access new markets. The ongoing failure of this process to deliver promised forest protection itself undermines the credibility of Tasmanian forest products on the international market.”

Bryan’s trade mission, by Davo