Industry shuns 'offensive' forestry fund as workers walk

The state’s peak forestry body has slammed the state government over its “offensive” logging ban support package, as businesses grapple with a mass exodus of workers and the prospect of bankruptcy.

In September, the state government announced sweeping changes to restrict logging to forest management and approved mining activities by 2024 amid shifts in government regulation and pressure to make it more sustainable.

The plan was underpinned by a $350 million to expand softwood plantation plan and a $50 million industry transition fund, comprising transition packages for businesses, workers and communities.

But the business support plan presented to the Native Forest Transition Group last week was immediately rejected by industry, labelled by Forest Industries Federation WA chief executive Adele Farina as "offensive".

Ms Farina said the eligibility criteria was so restrictive, very few businesses would be able to access the “miniscule” payout.

Though a figure has not yet been publicly released, sources told Business News the package's combined value could be just several million dollars.

The state government has pushed for harvest and haulage businesses to continue until at least July 2023, but Ms Farina said skilled workers were leaving the industry in droves in search of more secure jobs.

Business News understands sawmills are being offered compensation calculated from expected supply volume data supplied by the Forestry Products Commission, but Ms Farina claims the figures were “plucked from the air” and fall well short.

Business faces bankruptcy

Among those to reject the package was Albany-based Redmond Sawmill managing director Corey Matters, who told Business News the compensation meant he was now facing bankruptcy.

Since buying the business in 2015, Mr Matters said he had invested $12 million, largely based on the state government’s commentary around the future of the industry and the need for investment.

With the Forest Products Commission’s own annual reports, endorsed by Mr Kelly, claiming hardwood logging in Western Australia met environmental standards and was considered sustainable, Mr Matters said he was blindsided by the decision.

Based on the offer presented last week, Mr Matters said he would likely walk away with little more than $160,000 in compensation.

He said the industry was facing two major issues: an inability to retain staff and the value of their businesses dropping to zero.

“The announcement was made without any proper plans in place and, consequently, workers are leaving the industry because it does not have a future,” Mr Matters said.

“The harvesting contractors are also bleeding staff, so they can’t supply the sawmills with logs and we can’t run our businesses properly; that’s having a financial impact.

“The second issue is that the minister [Mr Kelly] has been very supportive over recent years and has made a lot of comments promoting and advocating for the industry and even encouraging investment.

“There had been no indication that there was a closure of the industry coming.

“These businesses, many of which are family run, have been going for generations and now their value is essentially zero; they’re going to go bust.

“The benefit of the $350 million plantations will take 20 years, so what happens in the meantime? 

“If you want to shut down the industry, fine, but compensate businesses fairly.”

He also warned the decision would have significant ramifications for a number of South West towns, which have been supported by the timber industry for generations.

State government, union strike deal for workers

While the details of the business packages remain exclusively with stakeholders and the transition group, the state government has today publicly unveiled its Workforce Transition Program.

The program, based on an agreement struck with the Australian Workers Union, will include a one-off worker transition payment of up to $10,000 for native forestry workers who choose to leave the industry in search of new employment.

If a sawmill closes or a worker is made redundant, workers will be eligible for a base payment of $30,000, with an additional $1,000 for each year of service to the industry.

The state government has also vowed to stump up $2,500 for each worker looking to reskill at TAFE.

Mr Kelly said the state government had worked closely with industry to develop a suitable transition package for workers.

During a press conference this morning, Mr Kelly said the transition plan would support workers, businesses and communities with links to the native forestry industry.

He said the state government had been listening closely to workers and working closely with the Australian Workers Union to develop these support programs in recent months and promised that consultation would continue as the plans are finalised.

“This was a historic decision to stop the logging of our native forests and protect them for generations to come,” he said.

“We estimate that there will be 500 workers affected by the decision, and this package will give substantial support to those workers who may be displaced between now and December 2023.

“It offers a substantial payment for workers made redundant and there will also be retraining assistance provided.”

The union's state secretary said that although the union was not pleased with the initial decision, the package was fair and had the support of its members.

While welcoming the support for workers, Ms Farina said the differences between the business and worker packages were extreme.

“We welcome these packages but are still seeking clarification on several points, including the possibility that some workers may be ineligible,” she said.

“It is encouraging that these packages demonstrate the state government is able to provide just compensation for workers, now we need them to show the same courtesy to businesses.”