CHRIS UHLMANN, PRESENTER: It seemed like a good idea at the time: two and a half million acres of taxpayer-funded forests to make Australia self-sufficient in plantation timber. But more than a decade after most of the schemes collapsed, tens of thousands of investors are still out of pocket and looking for compensation for fraud and mismanagement through the courts.
Today what’s left of this multibillion-dollar agricultural disaster is literally a burning wreck.
Greg Hoy reports:
GREG HOY, REPORTER: They are the ghost gums, and now, by night, they’re setting them ablaze. The aim is to destroy vast swathes of blue gum plantation timber cultivated across Central Victoria and other States under so-called Managed Investment Schemes.
CHARLES PITHIE, TREE REMOVAL CONTRACTOR: It’s not viable to even harvest the trees. In this particular area there’s hundreds of thousands of acres that will just be cleared and stumps removed and turned back into farmland. … Queensland, Victoria, South Australia, Western Australia – it’s all the same.
GREG HOY: It’s a travesty and a tragedy afflicting rural centres like Casterton near the Victorian-South Australian border. Giant managed investment schemes Timbercorp and Great Southern arrived like a gale force in this region 1.5 decades ago with truckloads of tax deductible investment dollars and a huge hunger for land.
SHANE FOSTER, FARMER: The avalanche started where you heard of one or two farms in the area being sold, but then all of a sudden whole districts were going to the plantations and it was just devastating for people that were wanting to stay in farming.
DAVID LEWIS, LAND OWNER: We had Timbercorp and Great Southern make us offers to lease the land and at that stage they were pretty keen to get it because they had money to spend and not enough land to spend it on, I think.
GREG HOY: The boom was triggered by big tax deductions granted by the Howard Government and maintained by Labor for investments in managed timber plantations. The dream was to establish more than 2.5 million hectares of forest for Australian industry.
[Sticker: PRODUCT DISCLOSURE STATEMENT DATEED 21/01/04 – ATO Product Ruling Captial Forest units PR 2004/100/ Discounted Fees]
Casterton’s Karen Stephens is mayor of Glenelg Shire.
KAREN STEPHENS, MAYOR, GLENELG SHIRE: It was fantastic when it was there. We could see that, you know, OK, if this industry was going to happen, we couldn’t control that. That was being controlled by the Federal Government.
GREG HOY: With promoters spruiking sky-high returns helped by financial advisors paid secret commissions, 61,000 investors who were called ‘growers’ were lured into such schemes. The promoters got rich and the trees spread like a virus across the country.
SHANE FOSTER: Trees would be getting planted towards the end of the financial year and knew full well that those seedlings wouldn’t survive, but if they didn’t put them in the ground before the end of the financial year, they wouldn’t be able to obtain the tax breaks.
DAVID MARSHALL, AGRIBUSINESS ANALYST: It was greed and it was naivety driven by totally unscrupulous people.
GREG HOY: Sure enough, disaster struck. The bottom fell out of the timber market. Scheme after scheme has imploded. Only in plum plantations near seaports is timber harvested. Governments still won’t confirm the total tax revenue squandered on this grand scheme.
DAVID MARSHALL: I would estimate a minimum loss to government of $5 billion.
GREG HOY: The collateral damage to communities has been colossal once the boom bust.
KAREN STEPHENS: Now, you can imagine how you just take 70, 80 jobs out of a community overnight. Nobody came running to us to say, “Can we help Casterton?”
GREG HOY: Landowners like John Diprose and David Lewis were left in limbo by collapsed schemes. Though rental payments for trees on their land had ceased, they could neither harvest nor get rid of them. Investors or growers haggled endlessly in court with liquidators and banks.
JOHN DIPROSE, LAND OWNER: The court is ruling in favour of the growers who say that they have rights to the trees, albeit they’re not paying the rent and if I go in and damage the trees, I’m accountable.
GREG HOY: The scale of this disaster, not only for rural Australia and every Australian taxpayer, is simply mind-boggling. For 47,000 investors in one company alone, Great Southern, it all ended in heartbreak, tears or flames. And it wasn’t as though there was no warning. In fact, quite the opposite.
DAVID MARSHALL: I was at conferences with people from the tax office and ASIC. I explained in graphic detail that some of these things were gonna end in tears and nothing happens. You just – it makes you very cynical.
SHANE FOSTER: You couldn’t say anything against. If you’d go to a meeting, you’d hop up and try and mention some of these practices that were occurring that were wrong. You’d just get hounded down and quietened down and they’d made sure you didn’t have any comment.
GREG HOY: 7.30 has obtained documents from the former Great Southern Group revealing internal data on past and forecast timber yields. Prepared by key executives including company director and general manager of forestry Gavin Ellis, these figures are very different from numbers used in Great Southern’s prospectuses. We’ve shown them to agribusiness analyst David Marshall, who feels strongly investors were misled.
DAVID MARSHALL: A lot of this information has been hidden and buried, etc., but it’s slowly coming out. Internally their general manager forestry, the director of forestry on the board, they were submitting papers to the board showing that the average growth rate and the stumpage price – they’re the two key drivers of the return on a timber investment – both of them were between 40 and 60 per cent below what the prospectuses were saying.
SAM PATTON, AGRIBUSINESS VALUATIONS AUSTRALIA: They could make these statements and yet no-one was independently auditing on behalf of taxpayers so there was just this unilateral lack of accountability by government in not supervising them.
GREG HOY: In the Victorian Supreme Court, Australia’s largest class action involving 20,000 investors against Great Southern grinds on. At the 11th hour, former forest manager Gavin Ellis now says he will give evidence he personally discussed concerns that the company had misled investors with Great Southern’s founding director John Young.
Young, seen here in the garden of his plush Perth mansion, heavily sold shares in Great Southern before the company collapsed. In court he’s already spent almost $2 million mounting a vigorous defence.
DAVID MARSHALL: It’s an absolute smoking ruin, yet the executives of these big companies are extremely rich, and that’s what really upsets me, because the small people have absolutely got nailed.
GREG HOY: Others say someone else should bear responsibility for this unmitigated disaster.
Who do you think the culprits in all of this are?
SAM PATTON: The Federal Government, or federal governments, plural.
KAREN STEPHENS: Unless the Federal Government actually learns something from it, nothing’s been gained.
CHRIS UHLMANN: Greg Hoy reporting.
From here:
http://www.abc.net.au/7.30/content/2013/s3803638.htm
• Tasmanian Times’ 2011 Tasmanian of the Year John Lawrence warned for years about the MIS disaster; his warnings largely unheeded … John Lawrence’s regular comments can be found on his blog, Tasfintalk, here
• David Obendorf: Senior Greens claim the Tasmanian Forests Agreement will be tested in the Courts
The former Australian Greens leader Bob Brown said last week:”It is likely that a High Court challenge to the forest agreement deal seeking to deny citizens their right to stand in defence of this island’s threatened natural areas would be successful.”
While the current Australian Greens Leader, Senator Christine Milne said a similar thing on the fateful day the amended Tasmanian Forest Agreement Act was passed by the House of Assembly: ”I think this whole Special Council provision is legally challengeable because it is saying the Special Council can instruct the Minister and the Minister ‘must’ act on that advice. Well, Ministers actually have a series of responsibilities in their portfolios and under the Law, and that is that they must be ‘accountable and subject to judicial review’. And I would bet that this Special Council – this trumped-up police force – that will write its little reports to the Legislative Council to make a judgement as to whether they will ever reserve an area; will be found to be illegal.”
The question is who will challenge this Act and when will they do it?
Please take the time to read Senator Milne’s interpretation of another attempt at a legislative outcome of Tasmania’s forest:
Senator Milne was interviewed on the Tasmanian Forest Agreement, 30 April 2013 – ABC local radio 936 – Drive Program by Louise Saunders [transcript]
Louise Saunders: In town [Hobart] not for a long visit today but, ahhh… given the sombre mood that we’re seeing around the Parliament, as this discussion continues on this legislation [The Tasmanian Forest Agreement Act], Tony Burke seemed to be the only one really cerebrating. This is just a little bit of what he was saying today.
Tony Burke, Commonwealth Environment Minister – 30 April 2013: ‘Let’s not pretend that you’re ever going to get an agreement that will stop a group of ahh… you know, a small number of people who hold up a sign. But let’s also not forget in this group would got the Australian Conservation Foundation, The Wilderness Society and Environment Tasmania as the ‘umbrella group’. When you when you’ve got all of those groups on side with the Agreement, it means that you cannot get an effective market campaign that will damage the Tasmanian market any more. And that… is a massive shift. And when you take out all the peak groups and have all of them on-side with the Agreement, that makes a massive difference for markets for Tasmania.
You’ll get the odd skirmish from small, minor… minor groups… and things like that, and you know, I, I don’t want to set a silly threshold. What we have seen from the last 30 years ends tonight and that is something to celebrate. ’
Louise Saunders: That’s Tony Burke talking in Hobart a little earlier this afternoon. With me is the Greens Leader, Senator Christine Milne, who said today that: ‘It is now clear the Tasmanian Forest Agreement 2012 is dead. It died in the Upper House.’
Senator Milne joins me, Senator good afternoon.
Christine Milne: Good afternoon, Louise.
Louise Saunders: Do you think that there is any merit to what Tony Burke is saying about the future… that is can succeed because of the concord of support that is there. And the commitment that the current State Government is giving; to seeing through some of the changes that have been subject to amendment in the Legislative Council?
Christine Milne: Well Louise, let’s just accept that the Minister is ‘gilding the lily’ appallingly in those kinds of remarks. They are very reminiscent of Neville Chamberlain’s “Peace in our time” remark frankly. I mean, the fact is he cites the Agreement of the ACT, The wilderness Society and Environment Tasmania as being “on-side”. Well what started out as a process to exit native forest logging has turned into a process to entrench native forest logging; to have those [ENGO] groups promote FSC certification for native forest logging and also to subsidise that native forest logging with tax-payer dollars.. And there are no secure conservation outcomes, except the World Heritage extension, and I do congratulate everyone involved including the federal Minister [Burke] and I look forward to the World Heritage nomination going through in June. But that is the only, secure outcome, ahh… everything else has been pushed onto the never-never… beyond the next federal and the next State election. And so these areas… this so-called ‘conservation gain’ is a moratorium which can’t be translated into permanent reserves until after October 2014… and then only if Forest Stewardship Council certification for Tasmanian logging, ahh… goes through. If in the eyes of the Legislative Council that the community has been silenced and there has been no market campaign. And the also, only is the Minister decides to make a reserves order. And if he or she doesn’t then the whole thing falls over… the moratorium lapses, and the legislation lapses and the sawlog quota is restored to 300,000 cubic metres [annual]. So the fact of the matter is, ahh… all we have got is the extension to the World Heritage Area and everything else is on the never-never… and the [ENGO] conservation groups agreeing to promote FSC certification for native forest logging and to adjudicate through this ‘Special Council’ which is dominated by the forest industry – to adjudicate on whether the community has been silenced adequately for the Legislative Council.
Louise Saunders: Nick McKim [Tasmanian Greens leader] in the Parliament and the ENGOs acknowledge those issues you’ve raised, and still they say that there is an element of optimism to be had into what can be achieved and to overcome those.
Do you see any grounds for any degree of optimism of any positive outcome out of the process for the last three years?
Christine Milne: Oh look, the process for the last three years ended up with a Tasmanian Forests Agreement. That was what was signed in 2012, and that is what the conservation movement and the Greens agreed to support through the Parliament.
The problem here Louise, is that the Legislative Council destroyed it. They completely destroyed the legislation and the integrity of the deal. And all that the House of Assembly is now doing is picking over a dead carcass… actually. The integrity of the whole agreement was gone. So it was a good attempt to get an outcome but it went horribly wrong when Lara Giddings dropped the ball and decided to allow her Leader of the Government in the Upper House [Craig Farrell] to support these appalling amendments… and that way that essentially means that the whole thing lost any momentum in terms of protection. And I fear we’re going to have the same thing happening, as always – millions of federal dollars pour into the logging industry as Tony Mulder said that’s what he wants; get the federal dollars, get the industry to rebuild and take a knife to the conservation outcomes. And that is what is exactly going to happen.
Louise Saunders: Would it have been better for the Labor Government then to have remained principled and allowed what would have seemed an evitable defeat in the Legislative Council, without Government support for those amendments?
Christine Milne: well, as I indicated… I think the Giddings Government ought to upheld the Agreement. That was what everybody said that they would do. And they [the Government] should have taken on the Legislative Council sent the Bill back unamended – and in that sense of taking out Legislative Council the amendment. Sent it back and said: ‘This is the Agreement; this is the Agreement that has the support of the federal government sand the State government, now pass it.’ And it’s basically a serious taking on of the Legislative Council.
Instead of that the Giddings government backed away and the NGOs have allowed them to do so; as have the logging NGOs, and left the House of Assembly picking over the scraps of what has been an agreement that was hard fought.
So, that’s why I say the Agreement is over. What they are now dealing with is nothing like what was agreed. And again all of the logging outcomes are dealt with upfront and the conservation outcomes pushed back to beyond a state and federal election. And I think that people can see then that there is a more sober assessment of the likely outcome.
Louise Saunders: The opposition, I think it was Peter Gutwein spoke of the TFA being a ‘call to arms to the green movement to again embark on protests. Is that what it is. Are we going to see, do you believe, renewed and more vigorous protests as environmental groups seek what they want to achieve in Tasmania?
Christine Milne: The environment groups throughout the State had, ahhm… had coalesced – more or less – around the Tasmanian Forest Agreement, which is now null and void. They never signed on to the kinds of compromises that have now been agreed by the Legislative Council and the House of Assembly. They didn’t ever agree to that. I certainly didn’t ever agreed to the idea that you should hold the reservation of a forest area ransom to a decision by a Special Council as to whether or not they think that the community has behaved well enough and been quiet and hasn’t gone and protested. And if that is the case, then they hold to ransom, ahh… granting of a reserve.
So, you cannot silence a community in that way. You just simply cannot take away people’s ‘freedom of speech’ and ‘right to protest’ and right to stand up for what they believe in. And that is a shocking precedent which would undermine forest campaigns and communities right around the country, if that was to be upheld.
And in fact, I think this whole Special Council provision is legally challengeable because it is saying the Special Council can instruct the Minister and the Minister ‘must’ act on that advice. Well, Ministers actually have a series of responsibilities in their portfolios and under the Law, and that is that they must be ‘accountable and subject to judicial review’. And I would bet that this Special Council – this trumped-up police force – that will write its little reports to the Legislative Council to make a judgement as to whether they will ever reserve an area; will be found to be illegal.
Louise Saunders: Christine Milne, are you disappointed in the Tasmanian Greens, with the exception of Kim Booth; the others indicating they will support the legislation accepting the conservation outcomes they see there.
Christine Milne: Well, they were put in appalling position, because the Tasmanian Forest Agreement was destroyed in the Legislative Council and [Premier] Lara Giddings allowed it to be so. She should have stood up and agreed to the integrity of that Agreement being maintained. She didn’t. And the ENGOs didn’t. The Environmental NGOs hand-balled a particularly disgraceful situation to the Tasmanian House of Assembly, and, ahh… the Tasmanian Greens had to do what they thought was the best in the circumstances. But we are all agreed that what has gone through the House of Assembly today is nothing like the Tasmanian Forest Agreement that was signed in 2012. That was the Agreement. Now what you’ve got is basically the carcass of that and people are picking over the scraps and deciding what can be salvaged or not. And I have a different view about that than the Tasmanian Greens, but I also have a national responsibility. And so, when I look at this I can’t possibly allow a national precedent whereby you have, ahhm… these silencing provisions. I can’t have a situation where you say to a third party, like the Forest Stewardship Council globally, that unless they give Tasmanian FSC certification then areas won’t be reserved, and I certainly can’t have a situation where, in the future, reservations depends on whether a Minister decides to bother putting up a reserve order, and if they don’t it all falls over.
Louise Saunders: As you say we don’t know who the Minister will be, but what do you see for Tasmania after 2014 if perhaps Tasmania does have a Liberal majority government which already now is committed to tearing down every aspect of this Agreement?
Christine Milne: Well, it’s inevitable. If there is a Liberal government, ahh… these areas will never be reserved. And so it’s always been my view is that the only reservation that we are going to see is the World Heritage nomination which will go through in June, ahead of the federal election. And the minute the Legislative Council removed the word ‘immediate’ and the words ‘as soon as feasible’ in relation to conservation outcomes, it was clear it was all on the never-never.
However I really welcome the World Heritage extension, it is something that I was fighting for Back in 1989 with Bob Brown and Peg Putt and others. And it’s fantastic that at last, what was held up by [then Labor Premier] Michael Field and {then Forest Minister] David Llewellyn and others then, will now go into World Heritage. But that is really… realistically, all this other talk about ‘great conservation outcomes’, I think is just talk.
Louise Saunders: And the forest wars will continue?
Christine Milne: Well, certainly everyone is going to say: ‘what they agreed to the Tasmanian Forest Agreement and that is not what has been legislated. So, I think people will feel free to, ahh… to be out there campaigning for their forests because they are not going to stay silent for after October 2014 what a Legislative Council or a future Tasmanian Government might do then.
Louise Saunders: Senator, I’ll leave it there. Thanks for your time.
Christine Milne: Thank you.
Louise Saunders: Thank you, Greens leader, Senator Christine Milne.
[ENDS – 12.26 minutes]
• Jenny Weber, Miranda Gibson: Old growth forest logging halted by conservationists in Tasmania’s south: “This logging operation is clear evidence that the Tasmanian Forest Agreement has failed, as we continue to see Tasmania’s old growth ecosystems destroyed for corrupt companies like Ta Ann. It is completely unacceptable that this destruction is being endorsed by the signatories to the agreement and by our government. Grassroots forest advocates will continue to take action in the defence of our native forests,” Miranda Gibson said.
• Jenny Weber, Miranda Gibson: Protest follows chain of destruction from the forest to Ta Ann mill
