News 3 -15 Round Table

THE SEATS TO WATCH

MORWELL Incumbent:Russell Northe (retiring) Key towns: Traralgon, Morwell, Toongabbie, Churchill Northe isn’t running this time with Gippsland doctor Kate Maxfield the Labor candidate and Traralgon plumber Martin Cameron endorsed as the Nats pick.

Q&A Panel

Carlie Porteous Michael O'Connor

General Manager Australian Forest Contractors Association

National Secretary CFMEU Manufacturing Division Karen Stephens

President Timber Towns Victoria

RIPON Incumbent: Louise Staley (Liberal) Key towns: Maryborough, Ararat, Beaufort, Stawell

BASS Incumbent: Jordan Crugnale (Labor) Key towns: Wonthaggi, Cowes, Kilcunda, Lang Lang

MILDURA Incumbent: Ali Cupper (independent) Key towns: Hopetoun, Mildura, Ouyen, Robinvale

SOUTH BARWON Incumbent: Darren Cheeseman (Labor) Key towns: Torquay, Moriac, Belmont, Grovedale

QWhat is the future for the hardwood/native timber industry in Victoria and Victoria’s timber towns?

Carlie Porteous

At the moment the future of the industry, these towns, and supporting industries and services is uncertain. We know that a reduction of approximately 45% Sales volume will be experienced in 2024 as a step down to the VFP 2030 policy decision. The Native Hardwood industry is a significant contributor to the local economy and a significant contributor to local volunteer efforts such as firefighting in most regional areas and Timber Towns. The flow on effects will be devastating for many of these regions as some have already reported significant reductions in key services such as healthcare and education. This is all, at the same time, as organisations such as the Regional Australia Institute reports a growth in economic output for more progressive states encouraging regionalization and growth outside of key metropolitan areas.

AFCA encourages the next state government to be more aligned with the Federal Labor Government’s own National Reconstruction Fund, which includes turbo-charging sovereign capacity for our wood and wood products industries. The policy framework was developed on the back of significant supply chain disruption through Covid and the Nations inability to produce critical items in order to keep the economy open. This has been exacerbated by the Russia/Ukraine war and timber import bans.

I see forestry as the key for the future and believe it has a significant contribution in meeting the Federal Labor Government’s 43% reduction in emissions goal. The science tells us that active and adaptive forest management, like that practiced by VicForests, not only mitigates the catastrophic effects of bushfires, but also absorbs more carbon than those ‘locked up’ for conservation purposes. Conservation and forestry complement each other, and always have.

Michael O’Connor

The future is still up for grabs. We know what the future looks like under the Victorian Forestry Plan. The plan is not an industry transition plan, it is an industry shutdown plan.

Last year the union campaigned for and won a big increase in support for timber workers who would be made redundant under the plan when wood allocations officially commence diminishing (Including redundancy “top up” to four weeks leave per year of work in the industry, to a maximum of $120,000) whilst warning that the plan still needed an overhaul.

This remains the case.

There is a potential opportunity for a bright future for a native timber industry in Victoria based on a sustainable yield brought about through sustainable forest management of allocated areas and log volumes sustainably used from management activity and harvesting ensuring the health of the forest and catastrophic bushfire mitigation.

Realising this opportunity will rely on political will and thinking which has been sadly lacking in recent decades.

Karen Stephens

We live in timber houses, surround ourselves with timber furniture and demand timber packaging as the environmentally friendly solution to waste.

Our sustainable Forest Management Certification and our Forest Code of Practice provide assurances that our forests are conserved and managed responsibility to ensure they deliver social, environmental, cultural and economic benefits now and into the future.

The ripple effect is very real as harvesting grinds to a halt, jobs will be lost across rural communities and will than effect every timber related industry in Melbourne with the flow on being consumers will not be able to buy Victorian or Australian made timber or products.

Timber Towns Victoria questions - why would a government that is all about ‘Growing Jobs’ close down an industry that is sustainable provides climate changes solutions and over 8,500 jobs across Victoria?

We may not see the impact of job loses for at least another 12mths as some companies still have timber supplies. But with no local timber being harvested in Victoria the ripple effect will been seen right down the chain and into furniture manufacturing in Melbourne. We already know that VISY has no pallets to deliver products to retailers for distribution across the supply network such as everyday items to supermarkets. So job losses are being felt in Melbourne but right at this moment the impact is squarely on rural timber communities such as Orbost – with 37% of jobs expected to go.

An independent report by Crowle Horwath for Rural Councils Victoria determined that for every job loss in Melbourne it was equal to 5 jobs losses in a rural community. It is a simple equation that the government is fully aware of together with the mental health impact on individuals and families where families have no choice but must move away, children leave school & sport – towns die.

QGiven the slow exit of operators from the native timber industry in East Gippsland since the announcement that the industry would close by 2030, how quickly could the industry recover if the decision was reversed by a new incoming government?

Carlie Porteous Forest Contracting businesses, by their very nature, are nimble and innovative. These business people and caretakers of the forest have learnt to adapt to different ways of doing things, evolving technology and changing landscapes over multiple generations. There will be new challenges, however. Uncertainty of contract tenure and historic government policy decisions has dealt a raft of complex challenges; attraction of skilled labour, or just any labour, reduction of training institutions and courses, and an unwillingness from financial institutions to underwrite necessary asset purchases.

The Coalition Government has reiterated its commitment to reverse the decision made by the current Labor government. With this level of commitment to our industry, Forest Contracting Businesses will be ready and able to get back to providing Australian markets with this much loved product.

Having a secure, long-term native forest and land management vision, with a positive social, economic and environmental outcome is welcomed by all forest contracting businesses and timber communities.

Michael O’Connor

An incoming Government would need to do more than reverse the closure decision which involves a step-down supply from 2024 and cessation of supply in 2030. It would need to present a plan based on a deliverable sustainable yield.

The last time that industry/ community was provided a Resource Outlook from VicForests was in 2017. The Outlook forecast mixed species supply between 100,000m3 and 115,000 m3 each year until 2022 and Ash sawlog supply of 153,000m3 per year and then 130,000m3 per year from 2020/21.

These volumes have not been supplied despite the Victorian Forestry Plan stating that contracted supply should be maintained until 2024.

A major impact of this has been litigation by Environment Groups seeking a swift shutdown of the native forest industry along with harvesting being stymied by the Leadbeater possum prescription and the impact of fires.

The industry will only be able to recover if it is provided a level of certainty about supply which has been absent since the previous Government refused to commit to long term contracts ahead of the 2014 election. Karen Stephens

There is no doubt that the survival of 8,500 timber related jobs across Victoria, many located in Melbourne desperately need a rethink of the current legislation by the incoming government.

With only 2% of suitably available land left for harvesting the contracting base is already diminishing which is exposing many rural communities to a very uncertain fire season. The local timber companies and their workers are qualified machinery operators, and each year are called upon to join forces and protect their township but with many of these individuals no longer living within their communities, the towns are exposed to further stress and uncertainly moving forward with no solution from the government.

In practical terms if the new government reversed the decision, we could only hope that operators would happily gear up and swing into action.

The incoming government will also need to reconsider how it fulfils the governments guarantee supplies to Australian Paper with timber product to protect thousands of jobs.

QThere is a shortage of plantation timber. What does an incoming State Government need to do in terms of new plantations and how quickly?

Carlie Porteous

There is a well reported and significant shortage of structural timber within the Australian market, which is causing delays in affordable housing. This shortage will soon be exacerbated, as the nation looks to open up and welcome back migration pathways to fill critical skills shortages. These skilled migrants and labour entrants will need housing, soon. Wood is the perfect building material as it stores carbon for its lifetime and is 100% renewable. As reported recently by VFPA, Victoria is tipped to grow in population in Metropolitan Melbourne by 87% to 2056. All this growth will require a well consulted strategy for locally grown structural timber. At the same time we are also seeing significant demand for visual grade timber such as Ash from Victoria, and a progressive move to fibre based packaging and single use objects to replace plastics.

However, despite all this demand, souring land price is still a barrier to investment for many Timber Investment Management Organisations (TIMO). As such, the state government, like in previous decades where we saw any level of growth, will need to aid investment into the establishment of new plantations. This can be done by reviewing government owned, existing crown and utilities land use for potential establishment and farm forestry encouragement models.

AFCA would also like to ensure the process encourages a diverse range of management organisations and investors to ensure the state has sufficient competition and choice, whether as a contractor or a customer of wood products.

Michael O’Connor

The Gippsland Plantations Investment Program has been a major disappointment. To invest $120 million and leverage the private sector to plant just 14,000 hectares over 10 years (increasing Victoria’s plantation estate by just 3.3% {and softwood estate by just 6.2%}) demonstrates the severity of the challenge at hand.

The priority for the State Government, working with the Federal Government should be schemes which incentivise the replanting of short rotation hardwood planted under the MIS to long rotation plantations rather than allow that land to be reverted to less social, economic, and environmentally beneficial use.

Given the price of land being a prohibitive barrier to new plantation establishment, incentivising the utilisation of crown land and farms for plantation establishment needs to also be a priority.

Certainly, the Australian Government ensuring that there is forestry friendly offset eligibility for emitters - compensating for emitting above their safeguard allocation - will be a key piece of the puzzle of providing the sector with opportunities to fully participate in the lower carbon economy.

Karen Stephens

We need to ensure the incoming government immediately rethinks mixed species timber harvesting volumes and bust open the myths around native timber that led the current Government to the ill-advised policy of phasing out the industry.

It is a myth that plantation wood will meet the timber demands. But we already have a massive undersupply of hardwood timber, as anyone in the construction or furniture industry will tell you.

The timber supply shortages has already pushed up prices for the wood used in home construction and we have a domestic solution to this problem if only the Victorian Government would allow normal, regulated harvesting. If not, people will continue paying more for their homes.

We need the incoming government to understand that our local forestry industry produces most of our housing, furniture and other wood-based products, including fibre, and there are not better alternatives to timber – timber is a natural product and it’s renewable!

It’s a far more environmentally friendly option than vinyl and plastics which end up in landfill and remain there for hundreds of years.

As the current government have not provided the alternative of plantation timber the supply gap in the market will continue to grow every year. The establishment of plantations will take time and the grow rates of any species of tree will not keep you with demand. The average three-bedroom home requires 14 cubic metres of timber to build the frame.

The only real alternative is imported timber from places where often the forestry practices are far less regulated than in Victoria/Australia and we already import timber to the tune of around $2billion worth each year.