House debates
Tuesday, 23 March 2021
Committees
Agriculture and Water Resources Committee; Report
4:26 pm
Rick Wilson (O'Connor, Liberal Party) Share this | Link to 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.
4:31 pm
Brian Mitchell (Lyons, Australian Labor Party) Share this | Link to this | Hansard source
by leave—Today I rise to make a short statement on the House of Representatives Standing Committee on Agriculture and Water Resources' report Aussie logs for Aussie jobs: Inquiry into timber supply chain constraints in the Australian plantation sector.
It is with great pleasure that I speak about this report, as the deputy chair of the standing committee. The report concerns the nature of wood supply from Australia's plantation sector, including the projected timber volumes available over the next 30 years and the grades of logs available. The report also concerns the current and future demand for logs in domestic use, the competitiveness of log pricing and the opportunities that exist to increase Australia's wood supply. This includes the role that governments, federal and state—and territory, of course—have in assisting with and addressing problems faced by the industry.
May I take this opportunity to thank the many individuals, local businesses and stakeholders who took the time to make a submission to the inquiry. It was very helpful to read and hear the firsthand experience of Australians working in the plantation forestry industry, especially their insights into what is working well and what government can do to help assist development and to increase opportunity.
The report hands down 10 bipartisan recommendations for how Australia's wood supply from the plantation sector can be secured and grown. In particular, the report identifies ways in which government can take measures to assist. The report recommends the adoption of a voluntary code of conduct which can both facilitate access to timber by Australian softwood processors and underpin and strengthen the relationship between plantation owners and timber processors. This would ensure that cohesion between stakeholders in the timber industry can be had and that the growth of the industry can continue to occur.
Committee members agreed that plantation forestry works best according to free-market principles but we are alive to the fact that processors have encountered difficulty in sourcing timber, even when prepared to offer comparable prices to offshore buyers. There was broad agreement amongst committee members that if local processors are prepared to offer comparable or higher prices then the principle of Aussie logs for Aussie jobs should take precedence and that a firm signal should be issued to growers about this principle. Ideally, of course, we would like to be in the position where plantation supply is sufficient to meet the needs of both local processors and a growing export market. The report also recommends that the Productivity Commission undertake a review of the regulatory settings relating to the establishment of plantations in Australia. In doing so, incentives and barriers for plantation farmers could be identified. This will give government the best possible way of identifying the issues in the sector and how government can better support the timber industry.
I do note that prior to the May 2019 election, the government promised a program to plant one billion trees over 10 years. Nearly two years later we are barely scratching the surface of that promise and look nowhere near close to achieving even one-quarter of the goal unless drastic measures are taken. In short, the government needs to do less announcing and more planting. I do urge Minister Duniam to put on his wellies, grab some seedlings and get to work.
Forestry has a long and proud history in Tasmania in particular. The recommendations in this report, if implemented by government, will help sustain industry viability for the future. Plantation forestry is an industry we should be proud of. It provides jobs and livelihoods for regional communities and a material that is natural and recyclable. Timber isn't just good for house frames and paper pulp, it can replace concrete in multistorey projects and the millions of tonnes of fossil fuel based plastics that bedevil our planet. Just imagine a world where everything that is plastic is replaced with a cellulose based and biodegradable natural fibre. That's the promise of plantations—where our cities can take shape from timber and composites. The future is better with forestry in it. It is with great pleasure that I commend the report and its recommendations to the House. Like the chair, I thank all members of the committee for the collegial way in which we undertook this inquiry. I especially thank the hard work of the secretariat, led by Jenny Adams. I commend the report to the House.
4:36 pm
Rick Wilson (O'Connor, Liberal Party) Share this | Link to this | Hansard source
I move:
That the House take note of the report.
Llew O'Brien (Wide Bay, National Party) Share this | Link to this | Hansard source
The debate is adjourned. The resumption of the debate will be made an order of the day for the next sitting.