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Legislative Council - Fifty-Second Parliament, Second Session (52-2)
2012-10-18 Daily Xml
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FORESTRYSA

The Hon. R.L. BROKENSHIRE (14:58): I seek leave to make a brief explanation before asking the Minister for Forests a question about ForestrySA.

Leave granted.

The Hon. R.L. BROKENSHIRE: The Labor government that previously promised there would be no privatisations has today announced it has privatised ForestrySA plantation harvesting rights in the South-East for $670 million. On the last reported figures in 2010-11, the green triangle plantations covered almost 75,000 hectares. The government retains ownership of standing forests—so let us call them legacy forests—in the Mount Lofty Ranges and the Mid North covering approximately 14,000 hectares. Previous analysis conducted for the government and performed by others indicates that, as a stand-alone venture without the support of the green triangle plantations, the legacy forests are not economically viable. In fact, ForestrySA will now have more proclaimed native forest reserves under its management than it has standing timber. My questions are—and I would appreciate an answer to the four questions, so I will go slowly:

1. Has the government conducted a business plan for the legacy forests?

2. At what point did the government abandon trying to sell the legacy forests?

3. Will the government commit not to privatising the legacy forests?

4. As per the recommendations from the select committee, will the Minister for Forests agree to table all sale conditions imposed upon the Campbell Group?

The Hon. G.E. GAGO (Minister for Agriculture, Food and Fisheries, Minister for Forests, Minister for Regional Development, Minister for Tourism, Minister for the Status of Women) (15:01): I thank the honourable member for his most important questions. Indeed, we have not privatised our forests. We have looked at the sale of ForestrySA's forward rotations, and that has been completed. It was announced today that it was acquired by a consortium led by the Campbell Group. The Campbell Group trading in Australia is a 141 plantation, and it is representing a number of institutional investors, including Australia's Future Fund. So, it is a highly credentialled and very reliable organisation. It is one of the world's largest timber investment managers, and it currently manages over three million acres of timberland assets.

As announced today by the Treasurer, Jack Snelling, we have secured $670 million for the taxpayers of South Australia to continue to invest in future infrastructure, core government services, such as health, education, and law and order. The $670 million figure, I have been advised, is substantially above our reserve price.

I have spoken in this place about the round table that was established to look at conditions for the sale to ensure that employment risks were minimised and to ensure the long-term sustainability for forestry in the region. The round table came up with conditions, and those conditions were incorporated substantially into the contract. So, those commitments have been made. In terms of the—

The Hon. R.L. Brokenshire interjecting:

The Hon. G.E. GAGO: Are you talking about the native forests?

The Hon. R.L. Brokenshire: I am talking about the Kuitpo Forest, the Mid North forest and the western forest.

The Hon. G.E. GAGO: I have already talked in this place before about our forestry industry strategy. We have a strategy, and that strategy is about identifying our priorities, such as the policy position on the forest industry to increase investor confidence, and that remains a priority for all of our forests. Increasing the resource base and processing capacity to enhance industry international competitiveness remains a priority, as well as capturing new value-adding opportunities to maximise returns from plantation resources; achieving operating environmental issues across South Australia; harmonising regulatory regimes with other states; expediting planning, development and transport; promoting the environmental benefits of forestry and forest products to the public; establishing better consumer understanding and demand and also developing additional support and funding for things such as training and education; and fostering the capacity to pursue regional actions in support of that strategy. So, there is an industry plan in place.

One of the things that the round table was also asked to do was to look at some of the long-term industry sustainability propositions for the region. There is some work that they have begun with that. They have written to me and I have looked at those considerations and will determine the best way to go forward in terms of developing up industry policy and looking at some of those sustainability issues. That will be a comprehensive industry development proposition.

That work is in the pipeline, and I have committed to do that. I will determine the appropriate structure needed to do that. I do not know whether the continuation of the round table is in fact the appropriate structure to do that, but I have started some dialogue with the chair and we are looking at these matters. Currently, the industry board is in place, but I do not know whether that is the best structure either; we need something in between that. So, discussions are happening around what is the best way to go forward to develop a base so that we can develop up a very strong industry-based policy for our state.

The PRESIDENT: The Hon. Mr Brokenshire has a supplementary.

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