Jan 18, 2013

Timber looks to bailouts, concessions to ward off undertakers

What's the timber industry quietly seeking from government behind closed doors? What happens in these discussions will shape the debate for at least a decade, write Andrew Macintosh and Richard Denniss.

The native forest and forest product industries contribute a miniscule amount to the Australian economy (in the order of 0.15% to 0.20% of GDP). Despite this, it has dominated the minds and energies of many politicians and environmental policy makers for decades. Among other things, it helped spark the emergence of the environmental movement in the 1960s and '70s, defined a large part of the Hawke-Keating government's environment agenda in the 1980s and 1990s, was central to the environmental achievements of the Carr, Beattie and Gallop state Labor governments in the late 1990s and early 2000s, and helped determine the outcome of the 2004 federal election. In recent times, it has stolen much of the limelight in Tasmania as the Gillard and Giddings governments have tried -- in collaboration with industry and green group representatives -- to nut out a deal to refloat the industry. Much of the public debate around these negotiations has centred on the 500,000 hectares of proposed new reserves that are being offered in exchange for additional federal government funds. While important, of potential greater long-term significance are the policy concessions the industry is quietly seeking from government behind closed doors. What happens in these discussions will shape the forestry debate, and the native forest industry, for at least the next decade. The native forest industry typically describes its operations as being "sawlog driven". By this, it means that its primary target when harvesting is sawlogs. Pulplogs (i.e. those used to make wood chips and eventually paper products) are supposed to be merely an unavoidable by-product and, reflecting this, are often called "arisings". The reality is that the industry is dependent on pulplogs and woodchip exports. Since the late 1990s and early 2000s, native sawnwood producers have been muscled out of domestic markets by plantation softwoods and imported engineered wood products. This, along with supply shortages in certain areas, has resulted in a steady decline in sawlog production from native forests (Figure 1).

Source: ABARES, Australian Forest and Wood Products Statistics: March and June Quarters 2012 (2012).

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One thought on “Timber looks to bailouts, concessions to ward off undertakers

  1. Andybob

    A useful guide through the verbiage.

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