06/02/2009 - 15:02

State rejects help for timber industry

06/02/2009 - 15:02

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Western Australia's native timber industry has expressed shock at the state government's blanket rejection of requests for financial assistance, predicting job losses and mill closures will result.

State rejects help for timber industry

Western Australia's native timber industry has expressed shock at the state government's blanket rejection of requests for financial assistance, predicting job losses and mill closures will result.

Forestry Minister Terry Redman said the government had made a difficult but responsible decision but his description of the industry's request was labelled misleading by industry spokesman Bob Pearce.

"Some of the industry has called for a multi-million dollar package to effectively bail out two major companies," Mr Redman said in a statement.

"The State Government has taken the decision that it is not in the long term interests of the native forest industry to offer a taxpayer-funded bail-out of private company debt.

"We will not spend millions of taxpayers dollars in a bail-out that is not guaranteed to create a viable industry."

Mr Pearce said the whole industry is now in trouble, with reports compiled by URS showing companies were not viable in the medium term if they did not receive assistance.

"The industry is very disappointed about what has happened because what he's announced is that the government is going to do nothing," he said.

"We've been working with the previous government, who really created the problem, and now the current government to try and get a more viable situation for the native hardwood industry, particularly for the premium wood like jarrah."

The timber industry was pushing for new arrangements with the government over the supply and price of logs, which are firmly in the government's control.

"The government has got to realise that the resource is changing and it is using the old way of classifying and charging," Mr Pearce said.

"[The URS report recommended] an organised restructure or a disorganised restructure where companies go broke.

"This is pretty much it; we'll try and continue to talk to the government and the FPC to see if we can make improvements on the current arrangements around the edges."

 

 

Terry Redman's announcement is below:

 

 

Forestry Minister Terry Redman said today the Liberal-National Government had made a difficult, but responsible, decision about a request from the native timber industry for a taxpayer-funded restructure.

 

"Some of the industry has called for a multi-million dollar package to effectively bail out two major companies," Mr Redman said.

 

"The State Government has taken the decision that it is not in the long term interests of the native forest industry to offer a taxpayer-funded bail-out of private company debt.

 

"We will not spend millions of taxpayers dollars in a bail-out that is not guaranteed to create a viable industry."

 

The Minister said the industry was also essentially seeking better quality logs for less money, but the Government was not prepared to offer a log upgrade or a price reduction.

 

"The industry is not united on the best way forward. We have considered a whole range of options put to us about the future of the native timber industry by a number of industry stakeholders. There have been many opinions voiced but the core issue of the debate is how to create a viable timber industry - one that can stand on its own, without government support," he said.

 

"The current situation is the legacy of the previous Labor government's old-growth policy. Labor spent $161million of taxpayers money on a restructure and the outcome is that the main players are now crying poor. This industry is now paying the price for an ill-considered policy from the previous Labor government.

 

"We could do something similar which would be politically expedient, but it would simply be a band-aid solution and I refuse to throw good money after bad in the same manner."

 

Mr Redman said the Government would continue to talk to the forestry industry about ways the industry can be strengthened, without having to use taxpayers money.

 

"If the bigger companies can re-think their businesses and become profitable, then they can reap the rewards of having contracts to purchase the good sawlogs for the next five years," he said.

 

"I do not know what business decisions these companies will make in the coming months, but my focus is on the workers, their families and the communities that may be impacted if some of the bigger timber mills close."

 

The Minister said there could be a positive impact from the Government refusal to bail out companies that could not make their business plans work.

 

It could provide opportunities for businesses that were able to mill the State's wood products more efficiently, including the smaller and family-owned milling sector.

 

"This announcement gives the industry certainty. What we must do now is work towards supporting the industry that remains and the communities that rely on them," Mr Redman said.

 

"I would also urge all Western Australians to get behind their native timber industry. When compared to other products like steel and plastic, timber is one of the most environmentally friendly products that can be used in building and furnishings. By considering timber as an alternative, consumers will be helping the environment and supporting those who work in the timber industry.

 

"I believe there can be a vibrant, productive and prosperous native timber industry in this State. I will continue to defend and represent those who make a living, support a family and build communities within the timber industry.

 

"This may be a rough patch for the industry but I am confident it will come out the other side stronger, healthier and a source of great pride for the whole State."


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