03/08/2004 - 22:00

Federal forest grants create inequity fears

03/08/2004 - 22:00

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A multi-million dollar Federal Government assistance package for WA’s timber industry just before an election has raised questions about the process, reports Mark Beyer.

Federal forest grants create inequity fears

A multi-million dollar Federal Government assistance package for WA’s timber industry just before an election has raised questions about the process, reports Mark Beyer.

Bridgetown forest contractor Brian Wilson has been given the sort of financial boost that most business people only dream about.

The Federal Government has agreed to give him $1 million to subsidise the cost of buying new harvesting and haulage equipment and upgrading his workshop.

In return, he will take on just three extra staff.

Manjimup forest contractor Greg Smithers, who runs South West Haulage Company, is another big winner from the Federal Government’s $15 million forestry assistance program, announced last month.

Mr Smithers has been given $558,800 to subsidise the cost of buying new equipment.

He acknowledges that he doesn’t plan to add any extra staff, although he is hopeful that some casual employees can be made permanent.

Messrs Wilson and Smithers are among 50 business owners (and 28 community groups) to receive Federal Government grants.

Others include Rod Liebeck’s Pemberton Brewing Company, given $68,000 to help set up a micro brewery, and Anne Benham, who was given $64,000 for her tour boat business in Augusta.

For the recipients of these grants – especially those with little, if any, connection to the timber industry – it’s a highly fortuitous turn of events.

Some may say good luck to them.

But what about the wider public interest? Is this how taxpayers’ money should be spent?

And what about competitors who didn’t get a handout?

Geoff Brookes runs Brookes Transport in Dardanup, arguably the only substantial forest contractor in the South West who didn’t get a grant.

“I assumed it was for people hit by the downturn in the native forest industry,” Mr Brookes told WA Business News.

“As far as I was concerned the money wasn’t for me.”

Another person with mixed feelings about the whole scheme is Ian Marshall, who works for Maddington firm Softwood Logging Services and its sister company Albany Plantation Logging Services

He applied for funding for an industry-wide training scheme, designed to ensure the rapidly growing plantation forestry sector has a ready supply of skilled labour.

The application was successful, with $1.4 million awarded to support this very worthy project that will train up 160 people over the next six years

It’s a good outcome for the industry, yet the level of assistance does not seem commensurate with the broader economic benefit – especially when other forest contractors were given large grants collectively worth $4.6 million for purely commercial ventures.

Forest Industries Federation of WA director Bob Pearce agrees the scheme has had a mixed reception.

“I’ve had calls from people concerned it was creating inequities,” Mr Pearce said.

“Its not been greeted with universal joy.”

Federal Forestry Minister Senator Ian McDonald said the scheme was designed to help the industry cope with cuts to native forest logging instituted by the Gallop Government.

“This money lends a helping hand to an industry that has been bruised and battered by a State Government that has slashed timber allocations to a ridiculous level,” Senator McDonald said.

The industry would have much preferred the Federal Government to live up to its original promise to provide the money three years ago.

“We are obviously pleased to see the dollars,” Mr Pearce said.

“We worked long and hard to get the Commonwealth to honour their commitments to the industry.”

The industry would also have liked the Federal Government to co-ordinate its assistance with the State Government, which has provided $28.5 million to encourage new investment in value-added processing.

“I think its unfortunate the Commonwealth commitment of funds was completely separate from the State’s,” Mr Pearce said.

The Federal Government program includes significant assistance to sawmillers and furniture makers.

However, a notable omission was the failure to support the development of a furniture manufacturing precinct in Manjimup, which has been the industry’s main focus over the past few years.

The tight timing of the Federal grants program, which was announced only three months ago, also created issues.

Some companies that had recently invested in new equipment were unable to claim a grant, while others that plan to buy new equipment over coming months are among the biggest winners.

In most cases, the grant equates to 20 per cent of the planned private investment, though some unnamed applicants received a one-third subsidy.

Most of the groups that lodged an application were successful.

Senator McDonald said about eight applications clearly did not fit the guidelines, and of the remaining applicants, about 80 per cent were successful.

 

FEDERAL FORESTRY GRANTS

 

Establish training scheme $1,400,000

Study engineered lumber project $1,361,000

Buy mechanical harvesters $1,000,000

Build new craftwood factory $1,000,000

Buy mechanical harvesters $ 982,000

Establish Dwellingup business incubator $ 900,000

Buy mechanical harvesters $ 807,000

Buy mechanical harvesters $ 558,000

Buy "redundant harvesting machinery" $ 565,000

Buy mechanical harvesters $ 332,000

Buy mechanical harvesters $ 252,000

Upgrade Fremantle furniture factory $ 201,400

Establish tea tree plantation $ 92,600

Establish Pemberton micro brewery $ 68,000

Buy Augusta ferry $ 64,000

Upgrade Perth sawmill $ 54,500

Expand Manjimup restaurant $ 42,800

Web site for Pemberton gift shop $ 12,000

 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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