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18/2/05... latest govt position on break up of NSW Forestry dodgy plantation cross $ubsidy

From: ecology action
Sent: Friday, February 18, 2005 5:34 PM
Subject: Private: plantation privatisation off in favour of corporatisation but plantation alone or nf too?

[Any comments on this appraisal?]

Plantation privatisation is off, in favour of corporatisation but that corporatisation of just the plantations?

Or corporatisation of the native forest estate also? The first will help the environment, the second will not unless it is a conservation oriented one which is superfluous given the NPWS: The native forest should all be in direct public control and most obviously an existing department like a reconfigured NSW Forests with timber production objectives deleted as redundant, but even better an expanded NPWS.

This is the eye of the needle the govt needs to thread to break the native forest sector financial corruption to give the public back control of their public forests as state recreation areas but preferably national parks, and the state budget back their $100 million plus a year dividend from the plantations.

Reading between the lines the govt knows they need to keep the public land in govt control to avoid nasty politics but also that they need a business model to crack the secretive and corrupt financial accounting going on within the umbrella NSW Forests/State Forests department from the loss making native forest sector to the profitable plantation sector. They need the money for a drained budget and can't afford the $100 million a year sinecures to the nf sector, but they also need the politics to go smoothly given the big trail in the polls now. This adds up to a corporatised milch cow out of the plantations, and appeasement of the Green Party and union that the nf will remain in public hands to hold on to as many jobs as they can.

Mind you once financial separation kicks in, which I dearly hope is soon, nf workers will be looking for the abundant plantation jobs because their is no real future in their nf sector really: Just look at burgeoning Willmott's mill based on softwood plantation at Bombala compared with tired old Davis and Herbert near Nowra still using substantial native forest logs. There is a fair social justice case for some of the financial value released by breaking the cross subsidy which was simply going into propping up State Forests regional land baron bureaucracy going into employment adjustment packages for actual nf timber workers as they move over to the plantation sector which is booming. In the medium to longer term there is just no employment or social need for those workers to be trashing natural heritage water catchments in NSW. Plantation logging will need skilled and unskilled workers and drivers sector over time.

The evidence for this scenario above seems to be Ian McDonald nsw minister for Primary Industry interview on country hour available here via the internet (you can download real player from the front page of for free) at:

about 15 minutes into the show. [This audio link may be redundant now as they churn the links every week]

ABC synopsis without alot of nuances as at link:

"Plantations up for review - Gerard Callinan
Just how should the States forests be managed? By the state, or by a corporatised or privatised entity? The issue has resurfaced after many months, when the Premier told journalists it's "overwhelmingly likely" the State's timber plantations will be corporatised. Yesterday on the Country Hour we heard from a member of the Timber Producing Councils and Tumbarumba mayor, George Martin, with a qualified support for the move. Minister for Primary Industries, Ian Macdonald says the Government has "ruled out privatisation" of forests and is now engaged in a consultation process to find the best possible outcome. Mr Macdonald denies that the Premier's comments suggest a decision on the future management of the State's plantation estate has already been made.
Ian Macdonald: Minister for Primary Industries"

My take: He rules out privatisation all together in support of corporatisation, with broad brush distinction from Victoria under Kennet and full sale in New Zealand. He was pressed on why change at all from a govt department model and waffled but came around to saying we need an appropriate business model "like the energy sector": Govt controlled but operating as a business. Said carbon credits were looking okay too. I think this means they want to break the corrupt cross subsidy depriving the treasury of a decent return. Said he the government is still consulting and the final decision will be whole of government but that he had taken note of the union concerns "yesterday": This would be 'what's going to happen to the jobs in the native forest?' story quoting Craig Smith union rep, and Timber ProducingCouncils concerns "yesterday":

This latter refers to the Wednesday countryhour show available, audio about 31 minutes, in at: 

[This audio link may be redundant now as they churn the links every week.]

basic abc synopsis here

"Plantation plans becoming clearer - Emily Doak
New South Wales Premier, Bob Carr says it's "overwhelmingly likely" the State's timber plantations will be corporatised. The plantations are currently managed by Forests NSW, but under this plan, they could be transferred to a new publically owned business. In 2003, the Government commissioned investment bank ABN Amro to investigate the merits of selling the resource; a move which could generate a billion dollars for the State's coffers. Despite calls from the unions and local government, that report hasn't been publically released. But yesterday, Premier Bob Carr indicated corporatisation is now more likely than a full sale. The details are still scarce, but local government has described corporatisation as the lesser of two evils. Tumbarumba Mayor, George Martin is a member of the Timber Producing Councils, a group formed to lobby against privatisation. He says on the face of it, corporatisation is a good compromise.

Bob Carr: NSW Premier
George Martin: Tumbarumba Mayor"

Where is Tumby Mayor coming from? Well he knows his district will crush and gain the business of the native forest sector if the cross subsidy is broken to the nf which is negligible on the south west slopes of Tumut/Tumbarumba. But his area needs "community service obligations like Telstra" for fire management and road maintenance and community needs public access. These socio-economic goals can be achieved by corporatisation of the plantation sector by itself, without native forests which are an economic dead weight.

What if I am wrong and the govt wants to corporatise the native forest as well? If the government is stupid they will lump the two sectors together and gain next to no financial benefit from the restructure in annual dividend, unless they also intend to just foreclose on any native forest management values outside national park reserves and trash the lot of it as per the cataclysmic Ian Cohen scenario of burning for energy, escalate woodchipping to massive clearfelling etc etc destroying all water catchment values. That path would involve monstrous backlash across the spectrum from silted up farms, angry farmers, angry greenies, angry outdoor recreational rednecks as their favourite areas were turned into moonscapes and pine plantatons etc. I just don't see it happening. We need the water catchments standing if only to keep Sydney and east coast tourism alive.

What convinces me most is that there is no valuation on the native forest sector which everyone knows and feels is public space, but there is a valuation on the plantation sector which everyone knows and feels is cropping space. That means the government are focused on getting the real business in the plantation going cleanly to feed Treasury without all this financial noise and siphoning from the bogus nf sector.

The government says it is consulting still. But you can be pretty sure its a corporatised plantation sector. We should work to ensure the line is drawn there with no corporatised native forest sector, or a different corporation altogether ultimately subsumed into NPWS. We already have ex loggers working for the NPWS in Bombala.


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