Tasmanian forestry contractors using loophole to continue work after being paid to leave industry

A Senate inquiry has heard extraordinary allegations that Tasmanian forestry contractors who were paid by the Government to leave the industry are using a legal loophole to continue work.

There are also allegations of widespread rorting, and the Australian Federal Police is considering a request to investigate.

The forestry industry has been shrinking rapidly in Tasmania over the past few years, and successive governments have made almost $100 million available for contractors to leave the industry.

In 2011, after jobs were shed following the collapse of timber giant Gunns, the Federal Government stepped in again to help.

It established the $45 million Tasmanian Forests Intergovernmental Agreement Contractors Voluntary Exit Grants Program.

In return for exiting the Australian forestry industry for 10 years, forestry contractors could receive up to $3 million.

Key points

• Forestry contractors offered exit grants under 2011 Federal Government scheme.

• But a loophole allows them to pass their machinery to a family member under a new business name and keep working.

• Some contractors who have used the loophole say there is nothing wrong with the practice.

• But others say the practice is unethical and a cause for concern.

• The loophole is currently being examined by a Senate inquiry.

• There are also allegations of rorting of the Government program.

Read, Watch the full Michael Atkin report, 7.30, here

• Tasmanian Times has reported extensively on doubts going back years over exit payments … A selection:

• John Lawrence: The Tasmanian Forest Gravy Train

• Kim Booth: Greens pursue comprehensive state inquiry into exit payments

• Inquiry to shine light on dodgy forest exit grants

• Senate – and state – inquiry into forestry grants

• Mark, in Comments: Good point #22. When compensation was first proposed I remember suggesting the liquidation of held assets (machinery) should form part of the final compensation payment after distributions for loans (banks). It would have been a good idea, I reckon.