*Pic: Pete Godfrey’s pic of steep slope logging … Pete says: ‘Why Forestry Tasmania is subsidised to use cable logging to clearfell steep slopes, filling the waterways with silt and compromising soil stability, is beyond me’ …
The buck stops here … Shareholder ministers Minister for Resources Guy Barnett and Treasurer Peter Gutwein, with the ultimate buck-stop, Premier Will Hodgman
Forestry Tasmania Chairman Rob De Fegely has written a letter to Peter Gutwein and Guy Barnett, outlining the steps that Forestry Tasmania have taken to reduce their costs and to make the GBE financially viable.
In the letter he states that they have reduced their funding gap from $35.5 million in 2014 down to $16.3 million for 2016.
The 2016 figure is set to rise again as apparently FT is subsidised at the moment for plantation management and for Cable Logging.
Why Forestry Tasmania is subsidised to use cable logging to clearfell steep slopes, filling the waterways with silt and compromising soil stability, is beyond me.
FT expects the funding gap to increase to $24 million when this funding dries up.
Even with the proposal to export logs from Macquarie Wharf FT will still end up needing government support to remain viable.
FT cite problems with the costs of roading and upkeep of roads as one of its major funding problems.
Even though FT gets the trees for nothing, the costs of making and maintaining roads makes it difficult for them to be viable financially.
Forestry Tasmania has reduced its workforce from 400 down to 180 but cite ongoing superannuation costs for past employees as another problem with financial viability.
They also state that they can supply the required 137,000 cubic metres of high quality sawlog from the available forests until 2027, but after that will need extra funding to establish more plantations to meet demand after that time.
Amazingly FT also concedes that its contracts are unviable. It states it receives only 50% of the price for its logs on some contracts compared to other jurisdictions. We can only assume FT means other state logging companies and private foresters.
This is a massive thing to admit to – what it means is that FT has been selling logs at only half market value; no wonder the private forest industry has been struggling to compete with FT.
Surely the Australian competition commission should be on to this. This is anti-competitive behaviour.
Mr de Fegely admits that under the current legislation – and the way FT works – it will not be financially viable.
FT is also admitting its plantation resource is basically useless. It says they have no idea if the logs will be any good and what price they may be able to get for them.
FT advocates the full sale of all its plantations to help its bottom line.
It also states that it would like the statutory requirement for 137,000 cubic metres of sawlog to be reduced to 96,000 cubic metres.
It says that if it can sell the plantations it could use that money to pay compensation to sawmillers and to peeler log customers for the reduction in supply.
What a massive statement to make. FT needs to sell plantations just to pay compensation because it has been overcutting the forests.
FT also asks the government to change the law to allow it to source logs from private forests as well as Crown land.
There is more in the letter that you can read yourself, basically it appears that FT has very little chance of ever being an economically sustainable entity.
It also cannot supply the industry needs from Crown land only. It states it needs to be allowed to buy logs from private landowners as well.
It also admits it has been selling logs at well under commercial prices.
FT knows that the government will not accept its recommendations … so offer other suggestions that may be more palatable to the minister.
– FT’s bottom line is to sell all the plantations except its pruned plantations that make up about 20,000 ha.
– It wants to use Community Service Obligation money to pay for maintenance on reserves.
– It wants to sell 6000 ha of land that it somehow owns in freehold.
– To completely exit from the export industry.
– Jack up the prices for the logs it sells by moving to a stumpage model.
– Cut back on the amount of logs it has to supply. (an admittance that the logs are not there).
– Pay more compensation to Sawmillers and Ta Ann, (admittance that the contracts should never have been signed in the first place).
It appears that Forestry Tasmania is hoping to become an information base and manager of the forests and wants private operators to take over the logging and roading at their own expense.
• Pete Godfrey has worked as a self employed electrical contractor, as a builder, as an assistant manager in a timber yard, built and ran his own portable sawmill, cut fence posts for a living, worked as a youth worker in a juvenile detention centre, been a part-time TAFE teacher. Loves Tasmania and thinks it it the most beautiful place to live. Spent much of his life surfing, bushwalking and taking notice of what is happening to the land and water. That led him to write letters, produce reports, audit forest operations and document what was happening to our waterways, airshed and land. He gets a bit passionate at times about protecting what he sees as one of the most beautiful places on Earth.
Download – read for yourself – the letter …
• Geoffrey Swan in Comments: Thank you Pete Godfrey. EVERY Tasmanian needs to read the FT Letter you have enclosed … this is an appalling state of affairs … any private or shareholder business simply would not get away with any of this.
• Mike Buky in Comments: … The current model is disastrous for all. Blind Freddy can see that FT is not only dead but should be buried and cremated. How much longer will the Tasmanian population have to tolerate coughing up for an industry that is costing them so much? When is a Tasmanian government going to bite the bullet and dissolve this failing industry?
• John Hayward in Comments: What an extraordinary document to find on a website, setting out the seemingly deliberate gross mismanagement of a GBE, a kind of transfer pricing with a private sector which is supposed to be customers. How could a GBE which has lost over a billion dollars since being established in 1994 manage to sell its public forest wood at 50% the stumpage rates charged elsewhere in Tasmania? Who drafted and signed the long-term contracts for more wood than FT could sustainably supply to customers which locked FT into perennial losses? Why, if not to exonerate present FT management from complicity, was this letter made public? …
EARLIER on Tasmanian Times …
THE BOARD of Forestry Tasmania …
• ‘Our team …’
• John Hawkins in Comments: On the Hansard website I discussed in great detail the letting of loss-making contracts to Ta Ann by Rolley when CEO of Forestry Tasmania. Thankyou Andrew Wilkie MP for tabling them before Parliament: HERE … Come on de Fegely call a spade a spade and resign or are you also yet another Tasmanian crony appointment – hear nothing, say nothing, do nothing, just take our money? …
WEDNESDAY, December 14 …
• John Lawrence in Comments: … The repeated cries for FT to be wound up seem to be missing the reality that this is already happening in front of us. Go easy on Mr de Fegely, John (#14). After he authored the expert opinion report on feeding native forests into the Gunns pulp mill, prepared as part of the pulp mill IIS, I don’t think anyone takes him seriously any longer. He might be Chair of FT but it’s a nominal position with Tony (Ferrall) in charge.
• John Hayward in Comments: Before being mollified by John Lawrence’s assurance that FT is under “de facto” voluntary administration, readers should ask themselves why the VA is de facto, why the “real” administrator, Treasury boss Tony Ferrall, is not formally recognised, and why the political establishment ultimately responsible for the grotesque, bipartisan mismanagement of FT for many years is thereby enjoying the pretence of being a well-meaning bystander. There is no sign that our pollies were chastened by their disastrous attempt to bankroll a huge pulp mill with vast gifts of public resources, or that their efforts to dismantle the TFA are anything but a return to the same old racket. Mr de Fegely’s identification of gross managerial negligence may have been a hedge against possible legal culpability, but he did make it himself as a uniquely frank admission for a Tassie insider.
• Andrew Ricketts in Comments: The current poorly conceived RFA consultation process will not bring anyone closer and obviously is bereft of genuineness. It is repulsive. It is closed in mind and obviously stinks of bias. This hotly contested subject (forests and forestry) demands thorough consultation and a far reaching independent investigation now – for the overall health and wellbeing of the Tasmanian community, the industry and the natural environment, as well I suppose for the economic aspects, which I concede have a relevance too, although not my main focus.