Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I rise today to discuss the current state of the agreement that has been reached between the environmental groups and the forest industry groups in Tasmania on a set of principles designed to achieve the 100 per cent solution to the long-running conflict in Tasmania over native forest logging. Potentially, this is a great outcome for Tasmania. The Greens support this set of principles and support seeing the next six to 12 months being used to implement those principles, but it requires good faith from both sides for that to occur and it requires the Tasmanian and federal governments to work together to be able to implement those principles.

The potential for Tasmania to move forward by protecting its native forests and making sure it has a sustainable industry into the future is absolutely there. But I was alarmed yesterday when I saw the press release that came out from the Minister for Agriculture, Fisheries and Forestry, Senator Ludwig, and Bryan Green, the Tasmanian Minister for Energy and Resources. I was alarmed for two reasons. Firstly, in providing the $22.4 million package for exit assistance and ongoing business support for Tasmanian forest contractors, the federal government said that the state government would manage the $5.4 million in business support for remaining contractors on behalf of the Commonwealth. I will return to that in a moment. That is handing over $5.4 million to Tasmania. Secondly, Minister Green, in a press release welcoming the Commonwealth commitment, said:

The effect of the market downturn and the global financial crisis has brought the entire contracting sector in Tasmania to its knees.

This just shows the level of denial that exists in the Tasmanian government. It has been obvious since 1992 that there would be no market for native forest wood chips by the end of the 1990s. That is why the Greens in the parliament were arguing all that time ago to get out of native forests and make the transition into downsizing the plantation estate. As a result, in the last 20 years in Tasmania, a vast amount of money has been spent by the taxpayers in propping up an industry that was always losing its markets. Over that period of time, we have increasingly seen plantation wood chips being mixed in with native forest wood chips to lift them to a standard that the Japanese would take. It has got to the point where there is a wall of high-quality and even-quality plantation timber on-stream around the world, and you cannot compete with mixed-standard native forest wood chips in that market.

Equally, it appears that Bryan Green, the Minister for Energy and Resources in Tasmania, does not understand that by 1993 plantations had overtaken native forests as a sawn-timber resource in Australia. ABARE has made that absolutely clear. The writing has been on the wall since the early 1990s that it was time to move out of native forests and get into a different resource. But no, we have had ideologues propping up native forest logging all these years using taxpayers’ dollars to do so and the result has been promises every time. When $650 million was promised you had people saying, ‘This will guarantee the jobs in the forest industry; this will guarantee long-term processing,’ et cetera and it did nothing of the sort. How is it, after we have spent $650 million, we now have the industry on its knees? I would argue that it is because people like Minister Bryan Green continue to deny the realities of the global marketplace and continue to argue that the taxpayers should continue to put their hands in their pockets to prop up mismanagement.

I said the other issue was the Commonwealth handing the money over to Tasmania. Nothing could be worse in the current scenario, and that is because Forestry Tasmania has been the place where the Commonwealth grant funding from the last round, $250 million from the Community Forest Agreement, was given to Tasmania and paid upfront. Forestry Tasmania has been managing that fund. Earlier this year, the Tasmanian Auditor-General came out and made it very clear that Forestry Tasmania has been transferring Commonwealth grant money out of that fund and into its own operating expenses to use as cash reserves. That is disgraceful. I quote from the Auditor-General’s report. He says:

As its cash position has become tighter, Forestry has utilised the TCFA funds on a short term basis to meet operational requirements. Funds withdrawn are replaced at a future date when cash from normal activities is available to do so. Management are aware that the money ‘withdrawn’ as at 30 June 2009 needs to be replaced and expended on TCFA specified activities and regularly manage the overall cash position of the organisation on this basis. In the absence of TCFA funds, Forestry would need the flexibility provided by a working overdraft account.

What has happened here is that it has no cash reserves. It cannot operate without taking Commonwealth grant funding meant to be expended for transitioning out of native forests and old-growth forests and it is using it for its own resources, its own cash reserves. Why? Because it cannot borrow money. It got to the point earlier this year that the Treasury in Tasmania had to give them a letter of comfort to keep operating. That is the organisation that the Commonwealth has just handed $5.4 million to, supposedly to help the contractors. When are we going to see the Commonwealth money returned to the account that it is meant to be in to do what the Community Forest Agreement was supposed to be doing all these years? The fact is that Forestry Tasmania’s latest financial position has just been released and it is in excess of $250 million in equity loss. Where is it going to get the money to pay the Commonwealth back to be able to spend on what the Commonwealth allocated the money for? It is this parliament that allocated the money. The minister cannot just decide tomorrow, ‘Oh yes, you can use that Commonwealth grant money for operational reserves.’ The parliament allocates the money and that is the basis on which it is paid to Tasmania. We have just given another $5½ million to Tasmania to be, in my view, completely mismanaged by Forestry Tasmania.

At the very same time you have got Forestry Tasmania in this position, suddenly out of Forestry Tasmania you have a new group formed. This new group has been set up as the staff of Forestry Tasmania. They have set themselves up as the People of Forestry Tasmania because they have concerns about the forest principles—as in, they do not support exiting native forest logging. How is this so? The Tasmanian government says that it supports these principles, so what is its forest agency doing to its government business enterprise in allowing a situation where its employees set up a group to undermine the forest principles that we are supposed to be delivering here?

And it is not just people in Forestry Tasmania undermining these principles; it is also in the government bureaucracy. You have people like Karen Vadasz, for example, who came from the Forest Industries Association of Tasmania at the same time as Mark Addis, recruited by the then premier, Paul Lennon, across into the bureaucracy and into his office. When he became premier she was moved into Lara Giddings’s office—Lara Giddings was then the Minister for Infrastructure—and she has been there ever since as a direct one phone call away from the Forests Industries Association of Tasmania. And guess who is not enthusiastic about moving out of native forests—the Forest Industries Association of Tasmania.

At the same time as you have Bob Gordon, the head of Forestry Tasmania, supposedly supporting these principles, you have got the employees of the same organisation using the Forestry Tasmania logo as well—until they removed it yesterday, suddenly deciding that they needed to have a little bit of arm’s-length. So inside the very organisations that are supposed to be upholding these forest principles, you have groups of people actively undermining them.

These principles depend on the moratorium being declared on the high conservation value we get out of those forests and that moratorium should come into place at the same time as Commonwealth assistance is provided. But no, we now have money being spent and at the same time Forestry Tasmania is driving into the Styx. It has just built a new road into the Styx, into an area that it knows full well will be part of the moratorium. How provocative is that and how stupid? How much money are they still wasting when they know that this is going to stop? Their own government and their own organisation have committed to principles saying that the moratorium must be in place and they understand that the moratorium must be in place. But no, in one of the most highly sensitive areas where public awareness of the Styx is high right around the country, it drives in a new logging road, saying that it will log that coupe next year.

At the same time you have got Ta Ann, the Malaysian company that had set up in the north-west coast and in the south of Tasmania as well. It was a joint-venture with Forestry Tasmania and I am told that they are only paying $2 more than the woodchip royalty to have the timber delivered to their door. This means that Forestry Tasmania is subsidising them to the hilt, if that is the case.

David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Senator Bushby interjecting—

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I would like to know, if that is the case and if Senator Bushby can inform me. I would appreciate knowing that. I would like on the public record for Forestry Tasmania to tell me exactly the extent of their subsidising of Ta Ann. When they are in debt up to their necks, how can they possibly be subsidising this particular operation?

I think that it is incumbent on the Commonwealth to recognise that the $250 million that it expended in 2005 to 2010 has, in large part, been wasted. Even the Commonwealth Auditor-General when he had a look at these grants pointed out how utterly disgraceful the Commonwealth oversight of the grants was during that period. It will shock people to learn that you could apply for a grant for second-hand equipment. As the person applying for the grant, you could nominate the sum you thought that machinery was worth and then you got the grant even though you did not specify the make of the machine, what year the machine was made or what condition the machine was in. All you had to say was, ‘I would like to buy that excavator and I estimate that it is worth X dollars.’ That was it. You were also supposed to say as part of these grants how many jobs you would secure and what sort of future there was for the enterprise—but how many jobs in particular were there was the key. On almost all of these grant funding approvals they did not meet compliance on the number of jobs.

So the point of my standing here today is to say: yes, I support the principles; I think that it is fantastic if we can reach an end to the conflict in Tasmania over native forest logging, and I absolutely support that. But I do not support Commonwealth money being expanded until such time as we have a moratorium in place on the high conservation value forests and, as the money is expended, it is overseen by the Commonwealth. Frankly, Forestry Tasmania’s record for the management of money and its current financial status is so appalling that you could not trust that the money you allocated would be spent for the purposes that it was allocated. The Commonwealth must take control of this process. The Commonwealth must put in place rigorous performance audits on any grant money that it provides. It must be able to track that and it must be transparent and open.

The Commonwealth needs to go back and see who it has given money to in the last five years and whether in fact that money was spent on what it was meant to be spent on before people apply for another round of grants to exit the industry. In some cases people applied for millions of dollars in 2006-07 for their contracting businesses. Now, when many of them are insolvent, is the Commonwealth in any position to retrieve some of that money, as it should be under its contractual obligations? Let us get the actual coverage of the finance right and let us get the moratorium in place, because if you hand over the money without the moratorium all that will happen is that you will see more logging, more conflict and more outrage as the partners to this agreement actively undermine it and defy the principle and the investment of faith in the process, because they never wanted to end native forest logging in the first place.