State decision on future of native forest timber industry expected soon

The following is taken from an article in the Herald Sun newspaper written by James Campbell.

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In the next few weeks the State Government will make a decision which is likely to seal the fates of leadbeater’s possums and Victoria’s native forest timber industry.

Cabinet will soon consider a report from an advisory group which includes such possum-friendly folk as the boss of the Victorian Association of Forest Industries and representatives of VicForests, established to consider ways it can be saved “while maintaining a sustainable timber industry”. The report has gone to Environment Minister Ryan Smith and Agriculture Minister Peter Walsh. What it says, we’ll have to wait and see.

Government sources say that the two men take a different view of what should be done. Smith is believed to support the creation of a Central Highlands National Park to save the possum, while Walsh is prepared to accept a small area be set aside to save the timber industry. His line of argument with his colleagues is expected to be that this is a jobs issue, which in an election year should trump other considerations. The Government claims the industry employs 2300 people, but it is unclear how many of those jobs depend entirely on native forestry, rather than a mixture of native and plantation timber. The largest employer, with 900 jobs, is the Maryvale paper plant, which has indicated in the past it would be happy to shift to chips from plantations. VicForests itself only employs 114 people.

Normally, the smart money would be on “Walshie” to get his way. The Agriculture Minister has earned a reputation for winning internal battles. In a Smith vs. Walsh fight it would be no contest. The wildcard, though, is Treasurer Michael O’Brien and his department. O’Brien is unlikely to be impressed with an industry whose subsidies are retarding the growth of the private enterprise plantation industry. The possum may yet triumph over the loggers.

The full article can be read here.

For details on the proposed Great Forest National Park, check here.

The Herald Sun has some salient points about the finances around the economics of the native forest industry. Should the tax payer continue to subsidise the logging of our native forests potentially at the risk of losing the Leadbeaters Possum?. The article says:

As for VicForests financial statements, the best that can be said for them is that they are not as bad as they used to be.

(In the last year) its net profit was only $802,000 — which, while pretty dismal, is still better than the $96,000 it lost the year before.

VicForests hasn’t paid a dividend to the Victorian Treasury, i.e. the taxpayers, since 2007.

Indeed, it has only managed to pay a dividend twice since it was established in 2004. Across its eight years of existence it has reported an after-tax profit of only $12.3 million. But even that you can take with a grain of salt, as over the same period it has received government grants of $24.7 million.

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