Minority report
I am not able to support the Australian
Forest Plantation Report in its current form nor do I believe the Report could
be amended in a way that would reflect my views.
One of the principal reasons I pursued
an inquiry into this industry was because I felt that the 2020 Vision was
fundamentally flawed. At the outset, it was ill-conceived and was based more on
a political solution for the difficulties governments were confronting in the
debate over harvesting of the country’s native forests than providing a well
thought out plan for the development of an Australian plantation industry.
This has led us into an ad hoc approach
to the development of the industry. The ‘let’s get the trees into the ground
and work the rest out later’ approach has been one of the principal causes of
the problems confronting the development of an economically viable and
sustainable plantation industry.
One of the key objectives of developing
plantations in Australia was that of resource supply for our existing and developing
domestic industries. To date, the implementation of the 2020 Vision has, in
large part, failed to deliver the type of approach needed to secure the
long-term development of our domestic industry. And, despite a review of the
1997 Vision, with the exception of a few examples, this remains the case.
I am also concerned that environmental
and land and water use issues also remain largely unaddressed and, if allowed
to continue, will have significant consequences for the industry and the
country.
In the area of taxation, the current
application of the taxation system as an incentive for private investment in
the plantation industry has led to an influx of managed investment companies
with little or no experience in plantation or, indeed, forestry matters. They
have been more interested in fees and charges than developing a long-term,
viable and sustainable industry. This has also led to excessively high costs in
plantation establishment.
Many companies have used monies paid by
investors to buy land for themselves. Indeed, it was the evidence of at least
one company to a different committee inquiry that at least half of the money
paid by an investor was used to buy land.
However, had the investor bought the
land, the purchase would have been considered a capital purchase and therefore
not deductible under existing tax laws.
It should therefore be of concern that
investment companies are using monies that an investor has claimed a 100 per
cent deduction for to buy land at often very high prices.
This seems to provide an unfair
advantage over other possible land purchasers who do not have the advantage of
claiming the purchase cost as a tax deduction.
Additionally, there is little or no
institutional investment in the industry and this will not occur unless there
are major changes to taxation laws in this respect.
The Government must, if it is serious
about developing a valuable and environmentally sustainable plantation sector,
one that will underpin the long-term future of our domestic timber industries,
take steps to require the Australian Taxation Office to bring forward taxation
measures that will allow for continuous trade in plantation timber.
This would have the effect of
encouraging institutional investment, which is essential if we are to ensure
the long-term future of the plantation industry.
Another matter that must be given
serious consideration is the volume production of plantations; that is, how
much wood is being and will be produced per hectare from plantations.
This is very important for the domestic
industry and any industry development plans in the pulp and paper sector.
It is one thing having trees in the
ground, but how much wood they produce is another. We already know that most
existing plantations are substantially underperforming on the volume side.
The current approach to try and
overcome this is to seek out high quality, high rainfall sites, in an effort to
maximise growth rates. This approach has often led to a concentration of
plantings in the upper reaches of water catchment areas, which in turn is
creating community concern about water quality and supply.
In many instances, there has been
little or no hydrological work done to determine the effect on water
catchments. Add to this the use of chemical sprays and poisons for weed and
pest control, and it is no wonder the community is concerned.
It must surely be unacceptable in this
day and age that we indiscriminately poison hundreds of thousands of native
wildlife, birds, fish and other animals, through the continued use of and
reliance on 1080 poison - pesticides and herbicides.
It can only lead one to conclude that,
when it comes to dealing with these issues, governments at both state and
federal levels are morally and intellectually bereft.
There are many alternatives to the use
of such indiscriminate poisons and yet, despite these options, governments
continue to happily employ the poisoning approach.
The plantation industry is a very
important industry and we must continue to develop it. But we must do so in a
way that will ensure public support and the engagement of sound management
practices.
Despite the Report making some mention
of these issues, it does not, in my view, take the forthright and comprehensive
approach that is necessary to bring about the changes that are required to get
this industry on track and headed in a direction that will bring long-term
benefits to this country.
Given the significant amount of
evidence that was taken, it is disappointing to me that the Report has become
politically based, rather than a constructive and useful contribution to the
development of our plantation industry.
SHAYNE MURPHY
Senator for Tasmania