Rick Wilson (O'Connor, Liberal Party) Share this | Hansard source

On behalf of the Standing Committee on Agriculture and Water Resources, I present the committee's report entitled Aussie logs for Aussie jobs: The inquiry into the timber supply chain constraints in the Australian plantation sector, together with the minutes of proceedings.

Report made a parliamentary paper in accordance with standing order 39(e).

by leave—The timber industry provides a vital source of income for regional Australia. It remains a key industry in many communities generating much needed employment and revenue yet the steady decline in the extent of the plantation estate has domestic supply chains under significant strain. Because plantations can take up to 30 years to mature, they require a long-term investment horizon. Business decisions made today will affect the industry for decades to come. As more and more land is removed from the estate, domestic processors will continue to face difficulties securing local timber supply. The recent devastation of the Black Summer bushfires has shown just how fragile supply chains can be.

The Agriculture and Water Resources Committee acknowledges that reversing the decline in the plantation estate has been a goal of governments, both state and federal, for many years. However, it must be noted that to date these policies have had limited success. Though the committee welcomes the Australian government's plan to grow a billion new trees within the next decade, it has not yet resulted in a tangible expansion of the plantation estate. It is anticipated that plans to introduce a concessional loan scheme for new timber plantations will improve the viability of potential projects and help drive future investment. The committee therefore urges the government to proceed with this scheme for the betterment of this estate.

The committee also welcomes the establishment of nine regional forestry hubs across Australia. This will ensure that new plantations are located where they can be harvested economically and will avoid the previous shortcomings of the managed investment schemes. The committee has heard calls from industry to establish two additional hubs in the Northern Territory and south-east New South Wales. It recommends that the hub model be extended to these locations.

Notwithstanding the positive steps taken by governments to strengthen the domestic supply chains, it is clear more needs to be done if the timber industry in Australia is to flourish in the future. Fortunately, opportunities abound for meaningful change in the sector which will benefit processors and producers alike. The committee was pleased to take evidence from industry experts and stakeholders who believe that many present challenges can be met with sound solutions. From greater investment in Australia's forestry research and development capabilities, farm forestry, and exciting new possibilities presented by carbon storage initiatives, the industry is ripe for innovation and growth.

Australia is a net timber importer, importing timber valued at nearly $6 billion and exporting timber valued at nearly $4 billion. While the committee does not suggest we dispense with export markets, the size of the figures involved gives a sense of the growth opportunities available to the processing sector if they could access the supply they need to support investment and drive growth. The lack of transparency in softwood pricing is illustrative of the current challenges which could be remedied with appropriate action.

The committee was pleased to hear from producers that they aim to prioritise domestic processing wherever possible. Processors stress that they are willing to pay fair prices if only they can determine what those fair prices are. However, one key difficulty facing processors is their inability to accurately ascertain export prices for the timber they want to purchase. One solution to this problem could lie in the development of a voluntary code of conduct for the timber industry to facilitate long-term supply contracts between producers and processors. For the mutual benefit of both, it is anticipated that such an arrangement would better support the growth of an efficient domestic processing sector, while reducing the risk to plantation owners inherent in relying on export markets alone.

The committee believes that it is not the role of government to be involved in contract negotiations unless there is clear market failure. This is not the case, so it maintains that such a code should be generated by the industry itself, but recommends that stakeholders be supported by the Australian government in this worthy endeavour. A sensible solution such as this should go a long way to overcoming the complex challenges which have hindered the domestic timber industry for too long. From the evidence gathered by the committee, there is no doubt the Australian timber industry can grow once again and, indeed, thrive.

In conclusion, I recommend the report to all members of the parliament. I would like to thank the many organisations and individuals who contributed to this inquiry, in particular, Ross Hampton and the Australian Forest Products Association. And I particularly want to mention Mr Peter Badenoch of Mount Gambier, who took the time to convey to me his enormous understanding of and passion for the timber industry and its importance to his community. I would also like to thank my fellow committee members for their constructive contributions and, last but by no means least, the inquiry secretary, Tim Brennan, who has now moved onto the Parliamentary Library, and the committee secretary, Jenny Adams, for their assistance throughout the inquiry.

I commend the report to the House.

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