[Greens-Media] Tas Greens_Forest Contractor Buy-Out Tabled in Parliament_K Booth MP

[greens at parliament.tas.gov.au]

FOREST CONTRACTORS BUY-OUT PACKAGE - PROPOSAL TABLED IN PARLIAMENT
 
Auditor-General to Take Politics Out of the Issue

Kim Booth MP
Greens Shadow Forestry spokesperson

Tuesday, 18 November 2008
Contact: State Parliamentary Offices of the Tasmanian Greens, (03) 6233
8300

www.tas.greens.org.au


The Tasmanian Greens today tabled a Parliamentary motion calling on the
Bartlett Labor government and Liberal Opposition to support 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 move to debate their motion tomorrow, which if passed would
establish 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 will bring on for debate tomorrow our proposal for an exit
package to be established as a 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.

 "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."


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Text of Motion tabled today by Kim Booth MP:

That this House notes with grave concern the financial plight of
Tasmanian Forest Contractors, which was identified in the 2005 Paul Cook
& Associates report, yet the situation has since worsened:

Further:

1.      Gunns and Forestry Tasmania have used their monopoly power to
induce contractors to sign harsh and oppressive contracts;  

2.      Contracted supply is in excess of demand; 

3.      Contractors face financial ruin when volumes fall below 70% of
contracted quota;

4.      Gunns has been imposing periodic quota reductions, cut backs on
delivery hours and imposed non delivery days in order to manage their
over supply issue and shift the risk to their contractors;

5.      Forest Contractors have been calling on both State and federal
governments for help for many years detailing the intense and tragic
circumstances they face but to no avail;

6.      Paul Cook and Associates identified in 2005 that 30% of
contractors faced financial ruin unless an $18.7 million dollar buy out
package was provided;

7.      Industry Edge found in an August 2008 consultancy for the
Tasmanian Forest Contractors Association that: 

a)      Constant exploitation of contractors over a prolonged period of
time was occurring and that forest contracting would progressively lose
its viability

b)      The so called Fair Contracts Code is ineffectual when there is
such an imbalance in market power in the industry and supervening events
can be invoked with impunity;

And therefore, the House calls on the Bartlett government to: 

8.      Immediately fund a financial exit package of a minimum of $20
million dollars that allows those contractors facing financial ruin to
leave the industry with dignity;

9.      Instruct the Auditor general to assess fair compensation for
those contractors leaving the industry;

10.  Recover from Gunns and Forestry Tas the total cost of the package
by the imposition of a levy on all future woodchip sales; and

11.  Place into conservation an area equivalent to that required to
provide for the total contracted volumes of wood from those contractors
who exit the industry.





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