1. “THE FUTURE OF THE AUSTRALIAN HARDWOOD SECTOR “ ABARES CANBERRA MARCH 2011 DR DOUGLAS HEAD Principal Australian Solar Timbers

2. “THE PRESENT” INDUSTRY IS IN A “PERFECT STORM” OF FLAT DEMAND AND UNPRECEDENTED INTERNATIONAL INTEREST IN THE AUSTRALIAN MARKET BY IMPORTS. THIS IS EXACERBATED BY KEY COSTS RISING DISPROPORTIONALLY (LOGS, LABOUR, OH&S AND ELECTRICITY) AND IS RESULTING IN MARGIN CONTRACTION AND CORPORATE EXITS. INDUSTRY CAN ADAPT TO THIS UNPRECEDENTED COMBINATION OF CHALLENGES, BUT NOT WHILE IT MUST CONTINUE TO DIVERT RESOURCES TO ITS “SOCIAL LICENCE”.

3. “THE OPTIONS” 1.INSTANT CLOSURE 2.CLOSURE BY ATTRITION….. A THOUSAND CUTS 3.SOCIAL LICENCE REAPPRAISAL AND A GROWTH PLAN

4. “INSTANT DEATH” THIS REMAINS A VERY REAL POLITICAL OPTION. WHILST THERE IS DISCUSSION AROUND TAXPAYER COMPENSATION TO WORKERS, OTHER LONG TERM OUTCOMES RECEIVE NO DEBATE,INCLUDING: *DESTRUCTION OF OUR FORESTRY SKILLS BASE IN STATE AGENCIES *SOCIO-ECONOMIC OUTCOMES IN REGIONAL COMMUNITIES CAUSED BY REMOVING THEIR WEALTH PRODUCING INDUSTRY *WHAT WILL REPLACE THE FOREST PRODUCTS CURRENTLY GOING TO MARKET, AND WHERE WILL THEY COME FROM? CLEARLY WE SHOULD CONSIDER THESE FACTORS BEFORE AN IRREVERSIBLE COURSE IS UNDERTAKEN.

6. “DEATH BY ATTRITION….A THOUSAND CUTS” THIS IS OUR CURRENT PLAN. LOG PRODUCTION WILL DECLINE SOME 30-40% IN ABOUT 10 YEARS TIME. THIS AT A TIME OF CONTINUING SIGNIFICANT POPULATION GROWTH WITH AN EXISTING UNDERBUILD IN HOUSING STOCK. IT TAKES ABOUT 30 TO 40 YEARS FROM SEEDLING TO SAWLOG. OUR OPTIONS ARE TO CHANGE TO NON FOREST BASED PRODUCTS (READ NON RENEWABLE) OR IMPORT (PROBABLY LESS WELL SCRUTINISED PRODUCT BEING SHIPPED TO AUSTRALIA WHILST WE CLOSE REGIONAL JOBS AND EXCERBATE URBAN MIGRATION)…. OR WE COULD REVISIT OUR PLAN.

7. “SOCIAL LICENCE REAPPRAISAL AND A GROWTH PLAN” AUSTRALIANS WANT A CARBON POLICY….WHETHER BECAUSE THEY BELIEVE THE SCIENCE, THEY ARE UNSURE OF THE SCIENCE BUT WISH TO ADHERE TO THE PRECAUTIONARY PRINCIPLE OR THEY JUST WANT TO GET CERTAINTY TO GET ON WITH THEIR LIVES. CURRENT CARBON POLICY IS A SHAMBLE OF CONTRADICTIONS, MOST NOTABLY IN THE FOREST INDUSTRY, AS HISTORIC GREEN ANTI FORESTRY RHETORIC COMES INTO DIRECT CONFLICT WITH CARBON SCIENCE. GOVERNMENT MUST MOVE TO A COHERENT CARBON POLICY TO GET PUBLIC BUY IN. SCIENTIFICALLY FORESTRY IS AUSTRALIA’S ONLY CARBON POSITIVE INDUSTRY. IT CANNOT LOGICALLY BE FURTHER CONTRACTED WHILST WE SAY WE SEEKTO REDUCE CARBON EMISSIONS. INDUSTRY EXPANSION IS AN ECONOMICALLY EFFICIENT WAY TO ASSIST CARBON REDUCTION AND SIMILTANEOUSLY GAIN COMMUNITY SIDE BENEFITS.

8. “RECOMMENDATIONS FOR CHANGE” 1.CLARIFY FORESTRY’S “SOCIAL LICENCE” AS PART OF MAKING CARBON REDUCTION POLICY COHERENT. 2.URGENTLY DEVELOP A FOREST INDUSTRY GROWTH POLICY. 3.DEVELOP A VIABLE GREENFIELD MODEL FOR SAWLOG PRODUCTION THROUGH PLANTATIONS AND AGROFORESTRY, GIVING CONSIDERATION TO UTILIZATION OF STATE BASED FORESTRY AGENCIES SKILLS COMBINING WITH PRIVATE FUNDING AND GOVERNMENT INVOLVEMENT TO MAXIMISE MULTIPLE COMMUNITY BENEFITS FROM EXPANDING THE FORESTRY ESTATES. 4.ONCE CERTIFIED, LOGS PRESENTED TO INDUSTRY SHOULD BE AVAILABLE FOR BEST ECONOMIC USE. 5.GOVERNMENT ASISTSTANCE SHOULD LINK TO PRODUCTIVITY IMPROVEMENT (SAY OUTPUT/EMPLOYEE) RATHER THAN JOB CREATION TO ENSURE SUSTAINABILITY OF JOBS. THANK YOU