*Pic: Logging at Catamaran. Picture: Daniel Haley
First published June 10
Some comments on my earlier article entitled The Forestry Insanity ( HERE ) suggested that I estimate the dollar value of support for the forest industry in the decade following my earlier report. That is a major task but no-one doubts that it would be a large figure.
To substantiate, let me offer just four recent examples.
• Schedule A of the Tasmanian Forests Intergovernmental Agreement (May 2013) itemises $387.4m of support.
• As Minister for Forests Guy Barnett put it in his Ministerial Statement of 26 October 2016, describing the recent activities of Forestry Tasmania, “The only way the business was able to survive was by the former Government pumping in over $100 million to enable it to continue to trade”
• The bleeding has continued under the current government – in 2015 there was a cash injection of $30m, made via TasNetworks, and in 2016 another $26.5m.
• Let’s wait and see what further cash injections will be made in 2017, but in the meantime Forestry Tasmania’s unfunded superannuation liability ($153m as at 30 June 2016) is to be foisted on the taxpayer rather than the forest industry.
Without going into further detail totting up all the other odds and ends going back over the past decade, one doesn’t require a particularly firm grasp of balance sheets or cost accounting to make the case that the forest industry has received eye-watering amounts of support in recent times.
My article wasn’t meant to imply that Minister Barnett isn’t aware of this. He is, as his ministerial statement ( HERE ) makes clear.
No doubt some of the money was meant to compensate people who had existing contractual rights which weren’t going to be honoured. Fair enough.
But what I was arguing was that, after all this money has been spent, has it achieved its objectives?
One objective was to promote regional development by means of establishing commercially viable forest-based industries.
In his comments on my earlier article, Mark Poynter argues along these lines – that money for the forest industries is good because it promotes regional development. He argues that the alternative is rising unemployment.
When the pharaohs built the pyramids it employed a great many slaves, promoted short-term regional activity and increased Egyptian GDP. But an alternative might have been to use the slaves to improve irrigated agriculture based on the Nile. Employment and GDP would rise, as with the pyramid building. But in the second alternative the slaves get more to eat on a sustainable basis.
Rather than as Mark Poynter seems to suggest, the alternative to permanent support for the forest industry is not unemployment. Support can be used for other activities.
If regional forest industries still rely for their survival, after all this support, on wood supply provided at give-away prices, then it is time for a rethink.
Minister Barnett’s forestry bill (now being considered by the legislative council) does not face up to the need for a rethink. It proposes to open up new areas for forest harvesting, with under-priced wood supply.
Mr Barnett’s regional development strategy simply perpetuates the policy of mining the last old growth forests with little likelihood of promoting sustainable growth in the regions.
At least the pharaohs left some impressive ruins to show for their regional development policy.
*Associate Professor Graeme Wells (UTAS) was formerly at the Tasmanian School of Business and Economics at UTAS.
EARLIER on Tasmanian Times …
• Gordon Bradbury in Comments: The Tasmanian Government is threatening to “seek a fresh mandate” if the Legislative Council does not pass its forestry legislation. This reminds me very much of the 1981 “No Dams” Referendum when 45% of Tasmanian voters defied the State Parliament and wrote “No Dams” on their ballot paper. That referendum was the turning point in the dams campaign … If the State Government wants to play high stakes forest politics then the community should take on the challenge. Let us send a very clear message to the Tasmanian Parliament that we want the forestry madness to end, by supporting a “No Forestry” election campaign.
• Watch HERE: This documentary is now 8 years old and details an interesting time in forestry in Tasmania. Gunns Ltd and Forestry Tasmania were given the opportunity to have their views included in the film, but refused.