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House of Assembly - Fifty-Second Parliament, First Session (52-1)
2010-11-11 Daily Xml
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Ministerial Statement

FORESTRYSA

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Federal/State Relations, Minister for Defence Industries) (14:03): I seek leave to make a ministerial statement.

Leave granted.

The Hon. K.O. FOLEY: In the latter half of 2008, the nation and the state were faced with meeting the challenges of the sharpest and deepest global recession since the Great Depression. As a result of rapidly decreasing revenue forecasts, the government was forced to consider a range of options to ensure the sustainability of the budget in such a climate and meet our ability to meet increasing demand in our core services. Critical to that strategy was debt reduction and, in the Mid-Year Budget Review of December 2008, I proposed several divestment measures, including the sale of up to three forward harvests of ForestrySA. At that time I said:

…over the next 18 months, the government will work with ForestrySA and key stakeholders to explore the range of options for the upfront sale of ForestrySA harvests.

I also said at the time—

Members interjecting:

The SPEAKER: Order! There is too much background noise; it is hard to hear the Treasurer.

The Hon. K.O. FOLEY: I also said at the time that, 'This will be a considered and thorough process.' That is what we are doing. We have undertaken initial consultation and have met with ForestrySA's board, key customers and harvesting contractors to gain a better understanding of the forestry business. We have met with a range of industry analysts and commercial advisers, and we have monitored the global market for these financial assets carefully. We have not rushed into this investigation; we have taken our time and have taken a very measured approach. We are undertaking a comprehensive analysis of the commercial and policy options available to us.

As a result of this initial consultation, I believe the decision to investigate the sale of the forward harvests is now ready to progress to the next stage.

Today I can announce that the government will shortly engage a prominent external consultant with specific expertise in this area to undertake a detailed examination of the risks and benefits of the sale process and the options available to deliver the best outcome for taxpayers.

Ms Chapman interjecting:

The SPEAKER: Order! Member for Bragg, you are shouting out and we can hear what you are saying from here. Can you keep your voices down, please.

The Hon. K.O. FOLEY: The external consultants will undertake a comprehensive consultation process with key stakeholders which will in turn be used by them to help inform their development of a regional impact statement. The regional impact statement—which will be made public—will advise cabinet on:

The issues and the views expressed in the consultation undertaken in relation to regional issues;

The impact of proposals on regions and regional interests;

The full range of cost and benefits of the proposal on the region and its community, in particular on employment;

Strategies for managing the identified risks, impacts and issues, including the impact on downstream industries; and

The impact of the proposals on social inclusion and economic development within the regions.

Members interjecting:

The SPEAKER: Order!

Mrs Redmond interjecting:

The SPEAKER: Order! The leader will be quiet.

The Hon. K.O. FOLEY: The consultation process will include discussions with stakeholders, including local members of parliament, local councils, timber industry representatives, key unions, chambers of commerce, and others.

I expect the consultants to deliver their report to us by the end of the first quarter next year and then shortly after I will take a recommendation to cabinet for a final decision about the sale and its process. No such decision will be made until the consultation process and the regional impact statement is completed.

Members interjecting:

The SPEAKER: Order!

The Hon. K.O. FOLEY: This government is committed to the forestry industry in this state now and into the future. That is why we will be retaining ForestrySA in state ownership. That is why we will continue to replant forests on a commercial basis. That is why we have established bodies like the Forest—

Members interjecting:

The SPEAKER: Order! The member for MacKillop is being very noisy, and I have something to say soon, that you may go without any warnings today.

The Hon. K.O. FOLEY: That is why we have established bodies like the Forest Industry Development Board to look at ways to grow the industry more generally. Madam Speaker, the government is committed to getting this sale right and to ensure that we consult and grow this important industry sector into the future.

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