PAUL OOSTING, SIMON BRANIGAN
The forest industry report into the value of subsidies to the community used flawed methodology, contains serious errors and was misrepresented by the forest industry, according to Dr Graeme Wells.
The critique was produced independently by Dr Wells and was not commissioned by The Wilderness Society or Environment Tasmania.
Dr Wells, an economist at UTAS who recently released his own report into subsidies in the forest industry, has prepared a critique of the report prepared by Dr Bruce Felmingham for Forestry Tasmania and the Forest Industries Association of Tasmania.
“The forest industry has been misleading the public and government officials over the amount of taxpayer money it receives in comparison to other sectors, and over its returns to Tasmania,” said Paul Oosting, acting campaign director for the Wilderness Society Tasmania.
“Premier David Bartlett should establish a full public investigation into claims made by Forestry Tasmania. It is outrageous that Tasmanian taxpayers are being misled and essentially lied to over the use of their money,” said Mr Oosting.
Dr Wells’ earlier report examined support for the Tasmanian forest industry over eleven years and found that the industry has received more than $630 million in direct and indirect subsidies. He also found that despite the huge taxpayer-funded subsides, intended to create jobs, there have been steady job losses in the industry over the same period.
“Dr Felmingham’s report appears to have been deliberately based on misleading definitions of subsidies and even outright ignoring of a number of major subsidies.
This has led to a misleading and false analysis on the amount of subsidies the logging industry receives and their contribution to Tasmania,” said Phill Pullinger, director of Environment Tasmania.
“The timber industry always has and always will be an important part of Tasmania’s economy – but we urgently need to see commercial accountability brought into the management of logging in Tasmania,” said Dr Pullinger.
Dr Wells’ critique includes the following key findings:
* The Forestry Tasmania and Forest Industries Association (FIAT) funded report was inconsistent in the way it defined sectors. For example, downstream processing was included in the forestry sector, but not in the agricultural and fishing sectors. This has the effect of increasing the relative size of the forestry sector in relation to the other sectors.
* The Forestry Tasmania and FIAT funded report was based on fundamental misconceptions regarding the measurement of value added, making the sectoral valueadded estimates meaningless.
* The definition of subsidies was restricted in a misleading way, omitting important subsidies in the ‘forestry and timber processing’ sector.
* A comparison of results in the Report with publicly-available data from the Australian Bureau of Statistics suggests that there are serious errors in the Report’s measures of value added.
* The report ignores a number of forms of subsidy/assistance made to the forestry industry, including Managed Investment Schemes, the implicit subsidy paid to Forestry Tasmania on account of its low rate of return, and millions of dollars in direct cash payments made under the Tasmanian Community Forest Agreement.
* The allocation of subsidies to tourism was overstated by, for example, allocating the payment of $115 million to the TT line as an allocation entirely to tourism, despite the fact the ferries carry general freight.
* Payments made to the Tasmanian Aquaculture and Fisheries Institute are included as a subsidy to agriculture and fisheries, but payments to the Cooperative Research Centre for Forestry are excluded.
* Dr Wells concludes that the report defines subsidies in such a way as to minimise those allocated to forestry, and to increase those allocated to other sectors.
Dr Wells response to the Felmingham Report was published on TT: Here. Comment here
