House of Assembly Fifty-Second Parliament, First Session (52-1) 52 1 Parliament of South Australia House of Assembly published Ministerial Statement Ministerial Statement ForestrySA FORESTRYSA The Hon. J.J. SNELLING House of Assembly Playford Minister for Employment, Training and Further Education The Hon. J.J. SNELLING (Playford—Treasurer, Minister for Employment, Training and Further Education) (14:30): I seek leave to make a ministerial statement. Leave granted. The Hon. J.J. SNELLING House of Assembly The Hon. J.J. SNELLING: Today, I announce to the house the government's intention to proceed to the proposed forward sale of ForestrySA plantations. Members interjecting: The Speaker House of Assembly The SPEAKER: Order! The Hon. J.J. SNELLING House of Assembly The Hon. J.J. SNELLING: This is an important decision for South Australia— Members interjecting: The Speaker House of Assembly The SPEAKER: Order, members on my left will be quiet! The Hon. J.J. SNELLING House of Assembly The Hon. J.J. SNELLING: —and one that I have not agreed to without careful consideration of the wellbeing— Members interjecting: The Speaker House of Assembly The SPEAKER: Order! Members will listen to the Treasurer's statement. The Hon. J.J. SNELLING House of Assembly The Hon. J.J. SNELLING: —of families in the South-East. In December 2008, in response to the changed global economic circumstances, my colleague, the former treasurer— Members interjecting: The Speaker House of Assembly The SPEAKER: Order, the member for Finniss! The Hon. J.J. SNELLING House of Assembly The Hon. J.J. SNELLING: —foreshadowed the proposed sale of the forward sale of ForestrySA plantations as part of the 2008-09 Mid-Year Budget Review. Before the cabinet took this decision yesterday, we commissioned an independent external consulting firm, ACIL Tasman, to develop a regional impact statement. An extensive consultation process was carried out to identify any potential social and economic effects on the South-East from selling the forward harvest. ACIL Tasman consulted around 40 interested parties, including local councils, local community leaders, timber industry representatives— Members interjecting: The Speaker House of Assembly The SPEAKER: Order! The Hon. J.J. SNELLING House of Assembly The Hon. J.J. SNELLING: —key unions and chambers of commerce. Since February this year, when I was appointed Treasurer, I have repeatedly assured the people of the South-East that I would need to be satisfied that the jobs and welfare of families were secure before I agreed to any proposal. The RIS found— Members interjecting: The Speaker House of Assembly The SPEAKER: Order! The Hon. J.J. SNELLING House of Assembly The Hon. J.J. SNELLING: —that the proposed sale of forest rotations is unlikely to have a substantial economic impact on the region. On that basis— Members interjecting: The Speaker House of Assembly The SPEAKER: Order, the member for Norwood! Mr Marshall interjecting: The Speaker House of Assembly The SPEAKER: Order! I warn the member for Norwood. The Hon. J.J. SNELLING House of Assembly The Hon. J.J. SNELLING: —there are unlikely to be significant flow-on social impacts. Any major impact on the environment was also considered to be unlikely. The government proposes that a successful purchaser would take commercial control of up to— Members interjecting: The Speaker House of Assembly The SPEAKER: Order, member for Davenport! Mr Pederick House of Assembly Mr Pederick: Giving up $1 billion in profit. The Speaker House of Assembly The SPEAKER: Order, member for Hammond! The Hon. J.J. SNELLING House of Assembly The Hon. J.J. SNELLING: —three forward rotations of the softwood plantations in the Green Triangle. The purchaser would be subject to a replant obligation and be obliged to honour all existing log supply contracts with a complete retention of ForestrySA as manager for up to 10 years. The standards— Mr Williams interjecting: The Speaker House of Assembly The SPEAKER: Order, member for MacKillop! I warn the member for MacKillop. The Hon. J.J. SNELLING House of Assembly The Hon. J.J. SNELLING: The standards of community service functions, such as fire protection, will also continue. As a direct result of proceeding with a forward sale of forest rotations, I am taking these steps to ensure the interests of the South-East are protected. I will establish a South-East forest industry round table to be chaired by the prominent former Construction, Forestry, Mining and Energy Union national president, Trevor Smith, and comprising key interested parties. Members interjecting: The Speaker House of Assembly The SPEAKER: Order! The Hon. J.J. SNELLING House of Assembly The Hon. J.J. SNELLING: This will give advice to government on the conditions of any forward sale before going to market. I will provide sawmill owners who have existing log supply contracts with FSA an option to extend their current contracts by up to a further five years. This will assist— Members interjecting: The Hon. J.J. SNELLING House of Assembly The Hon. J.J. SNELLING: I will repeat that, ma'am, because members might not have heard it over the rabble. I will provide sawmill owners who have existing log supply contracts with ForestrySA an option to extend their current contracts by up to a further five years. This will assist to protect job security. I will ensure any sale condition includes the new purchaser agreeing to target rotation length at ForestrySA's current or planned levels. This will assist in keeping the integrity of the standard of forestry product coming out of the region. I will ensure that there is an obligation on the new purchaser to match ForestrySA's current level of planned viable domestic supply. This will guarantee a future for the local timber industry, and I will place a condition on the successful purchaser— Members interjecting: The Speaker House of Assembly The SPEAKER: Order! The Hon. J.J. SNELLING House of Assembly The Hon. J.J. SNELLING: —to report yearly to the government. This will ensure that they are meeting the conditions of the lease. In addition, the South Australian government will retain ownership of the land, water allocations and carbon rights of the Green Triangle forests, with the successful purchaser of the forest rotations paying a lease fee to the state for the use of the land. If the successful purchaser does not replant, they will have to return the rights to use the land to the state as the landowner. Importantly, the independently produced regional impact statement found that, irrespective of the proposed sale of forest rotations proceeding, there are many challenges facing the timber industry, such as increasing highly competitive imports of structural grade timber from Europe and, of course, the strength of the Australian dollar. The government— Mr Marshall interjecting: The Speaker House of Assembly The SPEAKER: Order, the member for Norwood! The Hon. J.J. SNELLING House of Assembly The Hon. J.J. SNELLING: The government recognises the importance of the forestry industry to the state and is absolutely committed to the sustainability of the industry. Based on all the information that has been provided to me, I am satisfied that the proposed sale structure— Members interjecting: The Speaker House of Assembly The SPEAKER: Order! The Hon. J.J. SNELLING House of Assembly The Hon. J.J. SNELLING: —coupled with broader industry and community support measures, will deliver— Mr Pederick interjecting: The Speaker House of Assembly The SPEAKER: Order, the member for Hammond! The Hon. J.J. SNELLING House of Assembly The Hon. J.J. SNELLING: —a prosperous and sustainable forestry industry for many generations to come. I have also— Members interjecting: The Speaker House of Assembly The SPEAKER: Order! The Hon. J.J. SNELLING House of Assembly The Hon. J.J. SNELLING: —released a full copy of the RIS report, which can be found at www.treasury.sa.gov.au. Members interjecting: The Speaker House of Assembly The SPEAKER: Order! Mr Pengilly interjecting: The Speaker House of Assembly The SPEAKER: Order! Member for Finniss, you are on a warning.