TIMBER INDUSTRY

Mr PEGLER (Mount Gambier) (15:04): Can the Treasurer tell the house about the outcome of the meeting he had with some sawmillers in the South-East?

The Hon. J.J. SNELLING (Playford—Treasurer, Minister for Workers Rehabilitation, Minister for Defence Industries, Minister for Veterans' Affairs) (15:04): New Zealand's richest man, the owner of Carter Holt Harvey, Mr Graham Hart, has been seeking to renegotiate the terms of their supply contracts with ForestrySA, which they entered into in an open-market process. Mr Hart has threatened to close down his two sawmills in the South-East and put 1,000 people out of work if his demands are not met.

In order to protect the South-East community and the timber industry, the government and ForestrySA have attempted to negotiate a sensible outcome by providing both long and short-term relief to Carter Holt Harvey during this difficult trading period. These attempts have been rejected.

Mr Pederick: What about the others?

The Hon. J.J. SNELLING: If the member for Hammond gives me a moment, I will get to the others. There are more players than just Carter Holt Harvey milling timber in the South-East. I certainly do not want to give one mill an unfair advantage over all the other smaller mills, which are also employers in the region. This week I met with the chief executive of Gunns, and three owners of smaller mills—South East Pine Sales, N.F. McDonnell and Sons, and Whiteheads Timber Sales.

As employers of hundreds of timber workers, they consider it inappropriate for the government to meddle in the timber industry in a way that gives one player a financial advantage over the others. They voiced strong concern to me that if the government gave Carter Holt Harvey what it was demanding it would be detrimental to their businesses. They told me plainly that they wanted the government to make sure that the interests of the entire industry were protected and that one big player not be allowed to muscle out the smaller millers in the region.

To give in to Carter Holt Harvey demands at their highest might well destroy the timber industry in the Green Triangle. The price being sought by Carter Holt Harvey in the long term would make it unviable to produce the high-quality, structural grade timber that is produced by ForestrySA and other foresters in the region. Instead, timber growers would be forced to grow lower quality, smaller diameter wood, most of which would be destined for export markets, or sell the land they have for other purposes.

I was very receptive to the arguments put to me by these sawmillers. The government has to strike a balance to look after jobs in the region but not give one sawmiller an advantage over all the others. I have given my commitment that the government will consult with them before any decision is made, while considering industry assistance options.

As is her way of late, I am pleased that the Leader of the Opposition has changed her mind after her initial call for legislation to be introduced to direct ForestrySA to give in to Carter Holt Harvey's demands. The government will continue discussions with all small millers and continue to work with the South-East community to ensure the viability of the timber industry.