- Private sector forest investment, skills shortages, climate change and carbon emission issues and resource security were big items on the Australian timber industry’s agenda ahead of the November 14, 2007, federal poll. Jim Bowden put some questions to Senator Eric Abetz, who was Federal Minister for Forestry and Conservation.
Jim Bowden: The capacity for forest tree plantings to offset carbon emissions is world recognised. What is your view on establishing an Australasian carbon trading market and thus promoting additional investment in tree plantations?
Eric Abetz: Plantation forestry certainly has an important and ongoing role in offsetting greenhouse gas emissions. Importantly, with appropriate planning plantation forestry can also deliver other vital natural resource management outcomes such as the management of land degradation, salinity and biodiversity. The Prime Minister [John Howard} has formed a joint government-business task group on emissions trading, which has been tasked to advise on the nature and design of a workable global emissions trading system in which Australia will participate. The Task Group is currently considering submissions and will report back to the Prime Minister by May 31.
JB: Skill shortages are manifest throughout the whole forest industry spectrum. How are you tackling this real problem, which impacts on planned infrastructure and processing investment?
EA: The general skills shortage reflects the rapid employment growth experienced in the last decade due to sound economic management. The government is committed to addressing the skills shortage in the forestry and forest products industry and has provided $4 million towards improving training and skills development as part of the Tasmanian Community Forest Agreement; funding for skills and training development as part of the National Indigenous Forestry Strategy; and $1.58 million allocated for a national Master’s Program in Forestry. These initiatives are providing opportunities for those seeking a career in the forestry, and wood and paper products sector.
The industry will be providing many opportunities over the coming years, therefore there is a need to attract people across the employment spectrum, from traditional foresters and nursery workers to engineers, electricians and truck drivers. There will be jobs in the forests, jobs in the transport industry, and jobs in the wood and paper products sector, including pulp and paper manufacturing. With a potential for new wood processing facilities, we are likely to continue to see demand in the coming years.
JB: Despite the RFA process, most state governments are exiting logging from public native forests. How are you facilitating the uptake of sustainable native forest management in the residual private forests? While some states have reduced the area available for timber production in public native forests, native forestry remains a very important sector of the industry. In response to the changing availability of public native forest resources, industry in some regions has become heavily dependent on the private native forest resource.
EA: Some RFAs specifically anticipated this transition with the parties agreeing to encourage private forest owners to ensure that their management operations are consistent with environmentally sustainable forest management practices. In recognising this transition to native forests on private land the government acknowledges the need for these forests to be sustainably managed. The states have in place or are developing codes of practice for timber harvesting of native forest on private land that support sustainable forest management. Nevertheless, in my view, codes of practice should not be excessively onerous or impractical or a mechanism to restrict legitimate sustainable management of private native forests.
The Australian government, in partnership with the states, is funding 21 Private Forestry Development Committees around Australia as part of a Natural Heritage Trust sustainable private forestry project.
JB: Private and leasehold forests provide the community at large with positive inputs into biodiversity and conservation, water quality, erosion and salinity control, and landscape aesthetics. What mechanisms do you favour in pricing these environmental services and providing a financial return to the owners?
EA: The role of forests in providing a wide range of services has not been recognised sufficiently, especially when they are provided in conjunction with a commercial return for timber production. Modern forest management, and indeed broader land management, whether it is private or public, should encompass sustainability in its operations and seek to provide all these services to some extent.
While pricing these services are a possible mechanism for ensuring they are provided more readily than they are now, it is very difficult to determine a value for them and therefore set a price. In economic terms, these are not values which the community has traditionally been required to directly pay for and any move in this direction will necessarily have to be incremental and based on very good science.
JB: Drought has highlighted water as a future battleground between rural interests and cities, farmers and tree growers, water conservation for our rivers and use for primary production. How do you think we should move to a resolution of these conflicting interests?
EA: The importance of water to our whole community is attracting interest at the highest levels of government, exemplified by the National Water Initiative (NWI). The NWI is the basis for all Australian governments to properly allocate water to users in a balanced way that maximises the triple bottom line outcomes. There is no doubt that a balanced outcome among the competing interests will require continued research into the best use of water, a better understanding of the impact of various land uses and some adaptation as the realities of our limited water supplies make choices necessary.
JB: The last decade, particularly, has seen a huge increase in the planted resource. What needs to be done to ensure the capture of further value through processing of this maturing resource?
EA: In the absence of appropriate infrastructure, Australia will not be in a position to capture the full range of benefits associated with our maturing plantation resource. However, the infrastructure required to capture these benefits is dependent on having a sizeable and sustainable resource. We now have the critical mass and confidence to begin adding further value to our raw forest products, particularly the production of world-class pulp and paper.
JB: Is there enough R&D activity for the national forestry sector and are the funding mechanisms appropriate?
EA: The current funding mechanisms provide a mix of government and industry funds, and the systems used provided for regular review of research programs to ensure that the priorities remain targeted to the sector’s needs. Research and development in the forestry sector is provided through a range of bodies. These include CSIRO Division of Forestry and Forest Products and its joint venture with Scion/Ensis; the CRC for Forestry and the Bushfires CRC; the university sector; and the Forest and Wood Products Research and Development Corporation (FWPRDC), soon to transition into a new industry owned body, Forest and Wood Products Australia (FWPA).
In short, there is never enough money for all R&D projects. But I believe we have shown a strong commitment through the funding of the above bodies.
JB: The MIS sector has recently emerged as the dominant funding source for plantation expansion as industrial growers and state governments reduce their commitments to ensuring future resource supply. Does the government have concerns about this trend?
EA: Prior to 1990, growth in the plantation estate was driven mainly by the softwood sector and was largely supported by loans from the federal government to state governments. When these finished in the early 1980s the states continued to invest in expansion of the plantation estate, but this had slowed by 1990 as the states shifted their investment emphasis from establishment to replanting of the harvested areas.
It was not until the 1990s that sizeable investment in hardwood plantations commenced, with most of the plantation estate established since then comprising hardwood. This expansion has been largely driven by the private sector, in particular managed investment schemes (MIS), which now account for more than 40% of Australia’s hardwood plantation estate of 40,000 hectares.
The government has made a commitment to continue support for the plantation sector through the taxation system. Without this private sector investment we would be struggling to progress meaningful plantation expansion, and the associated economic and social benefits this brings to rural and regional Australia.
JB: Superannuation funds appear to be diverting portions of their portfolios into forestry as part of their alternative investments. Do you see the Future Fund having any involvement in plantation forestry?
EA: Your readers would be well aware that The Future Fund is in the early stages of establishment and that until it appoints a chief investment officer it would not be appropriate to comment on specific investment decisions. Ultimately, its decisions will be based on the commercial viability of individual investments and the establishment of a diversified investment portfolio to spread risk across a range of asset classes. I would like to think that the fund, as well as other investors, will see plantation forestry as an attractive and worthwhile investment to be included within their portfolios.
JB: At last count, more than 30 organisations purport to represent sectors of the Australian forest industry. As minister, what advice would you offer on amalgamation, alignment of policy initiatives and effective lobbying efforts?
EA: The Australia forest industry is diverse. I am of aware of cooperation between sectors and representative organisations on specific issues, but competition and duplication are equally evident. In my view, there is scope for some rationalisation, for the industry to be represented by fewer organisations. It will certainly require courage and leadership to bring about change in the industry’s own interest and to focus limited resources to best effect.
[Eric Abetz took on a super-portfolio in the returned Rockliff government in Tasmania this year, serving an industry “that has always been close to my heart.”
Mr Abetz made a political comeback, winning the controversial southern electorate of Franklin for the Tasmanian Liberals in the March 23 poll.
He took on the Ministry of Business, Industry and Resources, embracing forestry and fisheries, resuming a political career that has spanned several roles, including Minister for Forests, Fisheries, and Conservation in the Howard government from 2006 to 2007.
Mr Abetz, with his home in Franklin, has long championed the Tasmanian timber industry, its workers and communities and has been a staunch defender of native and plantation forests.]
