Ineffective payouts leave contractors out to dry

The Tasmanian Greens said today’s hearings into the Federal Government’s botched forest contractor exit packages had found that many operators were left heavily exposed to the financial collapse of big forestry operations like Gunns and Forestry Tasmania because of unfair contracts.

Greens Forestry spokesperson Kim Booth MP said evidence at the hearing in Launceston confirmed the Greens’ long-held concern that contractors needed fair working contracts that would have allowed them to leave the industry without suffering huge losses.

“In 2007, the Greens argued against changes to the Forestry (Fair Contracts Codes) Act 2001 which transferred all market risk to forest contractors and away from the woodchip giants, Forestry Tasmania and Gunns,” said Mr Booth.

“Those changes meant that when the markets changed, the big forestry companies were able to change or cancel contracts and so leave contractors with huge payment obligations but no income.”

“Particularly telling was evidence from one contractor that the writing was on the wall in 2008 but due to the high debts that they were operating under they couldn’t get out of the industry.”

“If the contractors had fair and proper contracts in the first place then they would have been protected like any other worker rather than relying on the handouts from the public purse that are open to the rorting that we have seen.”

“To add insult to injury, when exit grants were provided, they were delivered with little fairness and certainly no commonsense.

“We know that the industry itself was over-contracted and work was declining well before the Intergovernmental Agreement process was established. Anyone saying otherwise is just trying to re-write history to find someone else to blame.”

“The saddest thing is that these exit payments, which could have helped the industry, have been so incompletely delivered that they are potentially harming other industries like civil contracting, because the guys that got a golden handshake went on to undercut market prices.”
Kim Booth MP Greens Forestry Spokesperson Thursday, 25 July 2013