[Greens-Media] Tas Greens_Forest Contractors Buy-out Exit Package Proposed_K Booth MP

[greens at parliament.tas.gov.au]

GREENS PROPOSE FOREST CONTRACTORS BUY-OUT EXIT PACKAGE
 
Call for Auditor-General to Assess Help Needed for Unviable Operators

Kim Booth MP
Greens Shadow Forestry spokesperson

Monday, 17 November 2008
Contact: State Parliamentary Offices of the Tasmanian Greens, (03) 6233
8300

www.tas.greens.org.au


The Tasmanian Greens today called on the Bartlett Labor government to
immediately provide for an industry exit strategy for the 30% of forest
contractors identified by the industry who face financial ruin through
no fault of their own.

Greens Shadow Forestry spokesperson , Kim Booth MP, said that the Greens
will be moving in Parliament this week for an industry funded exit
package for forest contractors whose operations are considered unviable,
and which would involve the Auditor-General to assess operators wanting
to leave the industry and determine the rate of compensation.

Mr Booth said that internal industry sources are saying that assessments
of contract quota viability levels indicate that contractors working
from 70% to 40% of their contract quotas are either unviable or are
borderline unviable.

The Greens' Proposed Forest Contractors Exit package:

- Aims to provide for the 30% of forest contractors identified by the
industry as being unable to survive to leave the industry with dignity
before they face financial ruin;

- Would require the Auditor-General to assess those most unviable under
current and predicted quota conditions and contracts.  This  will keep
it arms length from the government; 

- Would require that the equivalent harvest volumes to the exiting
contractors' tonnage should be transferred into forest conservation
reserves, which would also reduce anxiety surrounding high conservation
value forests that the community identified through the Tasmania
Together process should be protected from logging; and

- The payout package would be funded by an extra $1 woodchip royalty
charged to Gunns Ltd, and Forestry Tasmania on a pro rata basis.

"The Greens are today calling for an exit package to be developed as an
matter of urgency to allow those forest contractor operations deemed to
be unviable to leave the industry now before they face bankruptancy and
financial ruin," Mr Booth said.

"Within the industry it is recognised that, through no fault of their
own, there are too many forest contractors trying to operate in a
woodchip-driven industry that all forecasts have shown for years is
shifting into plantation and regrowth timber resources."

"Since the Paul Cook and Associates report in 2005, the industry has
known that there are too many contractors for the work available, and it
is recognised this is down to the big squeeze put on operators by the
woodchip industry interests." 

"The only way out for these people, who the woodchip industry
irresponsibly encouraged at the time they knew the resource was shifting
to plantation and regrowth, is for a buy-out exit package."

"It was bad government policy that encouraged so many to enter or stay
in an industry without the means of restructuring when the inevitable
changes occurred, therefore it is the government's responsibility to
find a way for these operators to exit with dignity."

 "Premier Bartlett has an opportunity to be a statesman and recognise
that government policy has effectively driven these contractors into
financial ruin."

"Worse still is that it is not only the big company of Gunns Ltd who is
responsible but publicly owned Forestry Tasmania is also to blame," Mr
Booth said.

Mr Booth said that the Tasmanian Forest Contractors Association engaged
Paul Cook and Associates in 2005 who found the industry in crisis and
requiring an $18.7 million dollar buy out package, which has since been
backed up by Brian Stafford's IndustryEdge 2008 report which shows that
the situation has worsened since then, due to over supply of contractors
and changes in market demand for low grade Tasmanian native forest
woodchips.




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