Limestone Coast Timber Industry

The Hon. C.M. SCRIVEN (16:05): I move:

1. That a select committee of the Legislative Council be established to inquire into and report on the exporting of wood fibre and other matters regarding the timber industry in the Limestone Coast of South Australia, with particular reference to:

(a) whether the exporting of wood fibre is in compliance with the conditions of sale of the radiata pine forests in the Limestone Coast sold by the previous state Labor government;

(b) the volume of radiata pine log being exported from the Limestone Coast area by all growers;

(c) the economic benefit and employment opportunities that could be gained through additional wood fibre based industries should the current exported logs be made available for processing in South Australia;

(d) options for increasing the availability of logs to South Australian processors;

(e) the supply agreements between forest growers and processors; and

(f) any other related matters.

2. That standing order 389 be so far suspended as to enable the chairperson of the committee to have a deliberative vote only.

3. That this council permits the select committee to authorise the disclosure or publication, as it sees fit, of any evidence or documents presented to the committee prior to such evidence being presented to the council.

4. That standing order 396 be suspended to enable strangers to be admitted when the select committee is examining witnesses unless the committee otherwise resolves, but they shall be excluded when the committee is deliberating.

This motion is very similar to one moved by the member for Mount Gambier in the other place. Sadly, that motion was defeated, and I will make some commentary about that a little later on. First of all, this motion is fundamentally about the importance of the timber industry. Forest industries make a huge contribution to the economy of South Australia, generating around $2 billion per year. It is a major employer in the Limestone Coast region. While estimates vary a little, the figure that I have seen most commonly quoted are 7,000 direct jobs and 14,000 indirect jobs, so over 20,000 people are reliant upon the timber and wood products industries in the South-East of the state. Of course, there are also significant plantation forestry assets on Kangaroo Island and some still in the Mid North of the state also. So it is a very significant contributor to the economy of South Australia.

The industry went through a significant downturn during and after the global financial crisis and for several years afterwards, but international and domestic demand in recent years has seen the industry booming. That is because of advanced technology, manufacturing and processing of timber, much of which was enabled through the funding of the South-East Forestry Partnerships Program and is now part of a thriving and very competitive industry.

Of course, this is great news for the industry in many ways. However, it does present a number of challenges. There is difficulty in accessing fibre. This is a nationwide problem. It is one that has been considered by parties of both persuasions. I am glad to see that there are plans afoot from the current Liberal federal government as well as some excellent announcements from the Labor opposition federally; in fact, one announcement was made today about the forestry plan. That is very good news, and it is worth acknowledging that it is a national problem in terms of supply of timber for processing.

However, in the South-East, smaller manufacturers in particular have specific difficulties, which affect their ability both to maintain their current businesses and also to expand. There are a number of companies that have expressed interest in setting up in the South-East, but the inability to access the timber resource is preventing that happening in some situations. There are a number of growers in the region, and most of them export timber either to a greater or lesser extent. That is an important aspect to note. There has been some concern in the local community that the export volume is too high, so one of the purposes of this select committee is to examine that.

The committee has been called for by members in the South-East. The member for Mount Gambier, as I mentioned, moved a very similar motion in the other place. Also, the member for MacKillop, Mr McBride, is very supportive of a select committee. In fact, quoting from his contribution in the other place on the member for Mount Gambier's motion, Mr McBride said:

I would like to express my appreciation to the Liberal government for allowing me to express my position on this matter in support of the member for Mount Gambier's motion…

Further, he stated:

It is the strong desire of my constituents and myself to realise an effective select committee process that brings together the information and hears from witnesses to identify driving forces in the sector.

I believe that a select committee would provide a transparent and bipartisan approach to support a regional industry…to achieve adequate log supply to value-add and grow the sector. I believe that the outcome will assist to identify how market transparency could be improved and how our region can better capitalise through value-adding to the timber and log products within our region. I am supportive of the select committee…

He said that he believes, as do his constituents:

…that we need to take one further step and support the motion to establish a select committee...

Unfortunately, we know that the member for MacKillop then did a staggering backflip, after stating his full support for a select committee, and voted against it. However, I am hopeful that perhaps the Liberals would do a further backflip, given that the Liberal government in the lower house in the other place voted against the member for Mount Gambier's motion. I am hoping that we might see a further staggering backflip, which would be the right one, which would support the establishment of this select committee. It has been called for by the members from the South-East whose constituents are most affected by the industry. It has been called for by me as a resident of the South-East, of the Limestone Coast, because it is something that would be useful.

We understand that there are difficulties with select committees that look at past actions of governments. What we are saying in the opposition and what I am saying in moving this motion is that we can acknowledge and look at that, but what the people involved in the South-East and involved in the industry want is to look at where we are now as well and how we can move forward.

The motion that I have moved is very similar to the motion moved unsuccessfully by the member for Mount Gambier. One difference, however, is an additional dot point, which states that the select committee would examine 'options for increasing the availability of logs to South Australian processors'. I want to emphasise to members that this select committee is about trying to find solutions. It is not trying to kick anyone. No doubt there might be some of that involved for those who want to use this for partisan purposes, but this is about trying to look at solutions—solutions for processors that are in the South-East and are having difficulty in accessing fibre.

In speaking against the similar motion by the member for Mount Gambier, the minister in the other place said that he is already doing everything that this committee might do through the Forest Industry Advisory Committee (FIAC) process. I have had contact from a number of stakeholders within the industry from the Limestone Coast since indicating that I would be moving this motion today. Some of those members are on that committee, and those members would still like the select committee to happen. So whatever the FIAC is doing—and I am hoping it is going to be doing some excellent work—it is clearly not enough, otherwise members who are on that committee and who are part of the industry would not be calling for this select committee to be continued.

I have also had some feedback from one stakeholder with concerns that under its current terms of reference the committee would access agreements between growers and processors that would impinge on competitive advantage if they were made public. I would just like to point out that that is not a risk in this select committee process. I propose that anything that is commercial in confidence would not be available publicly and, as we know, it cannot be FOI'd if it is in camera in a select committee.

I think the stakeholders in the Limestone Coast forestry industry can be easily reassured regarding their concerns, which are very few, so that is no reason not to proceed with the committee. One piece of feedback I did have was asking whether the terms of reference could be changed. A couple of the changes requested were that there be specific reference as follows:

To inquire into and report on opportunities to strengthen the forest products industries in the Limestone Coast of South Australia and in particular:

(a) barriers to investment in timber resources and processing capacity;

(b) opportunities to expand the plantation estate, including greater utilisation of farm forestry;

(c) strategies available to timber processing businesses to secure long-term timber supply;

(d) strategies to grow domestic manufacturing; and

(e) opportunities to maximise returns for timber processors from forest and timber residues.

I think all of those are very worthy points; however, I am not proposing to alter the terms of reference of the committee at this stage because I think all those things can be picked up, and I have put them on the record today to ensure that, if I am successful in having the support of the chamber in establishing the select committee, those issues are picked up. They are already available under the 'Any other related matters' aspect of the motion I have moved today.

I would like to commend the motion to the council, and when it comes to a vote in the near future I seek support for the establishment of the select committee. The key aspect of this is that it enables an exploration of the best future for the industry going forward and supporting local jobs, and that is something that should be supported. We have support from the Independent member for Mount Gambier, we have words of support—although he did not vote in favour of it—from the member for MacKillop, we have the support of many stakeholders within the Limestone Coast and the timber industries. It is something that should be supported and I hope that will be the case when we vote on it in the future.

Debate adjourned on motion of Hon. T.J. Stephens.