The Australian Forest Products Association (AFPA) has provided feedback on the Government amendments to the Treasury Laws Amendment (Making Multinationals Pay Their Fair Share – Integrity and Transparency) Bill 2023 (Bill). AFPA has said that plantation forestry was never the intended target of the Bill and has been inadvertently captured in the drafting of the Bill. Source: Timberbiz
As such, it is pleased to see some changes in the Government amendments to reduce the Bill’s negative impact on the Australian plantation forestry sector. However, AFPA remains concerned that the Bill (even with the Government amendments) will effectively cease plantation forestry expansion in Australia.
The Bill (even with the Government amendments) is still contrary to the Albanese Government’s election commitments in relation to plantation forestry, is contrary to the Australian Labor Party Platform in relation to plantation forestry expansion, is contrary to the National Forestry Ministers meeting in relation to plantation forestry expansion and is contrary to international commitments made by the Australian Government.
Currently, under the balance sheet method, plantation forestry companies could claim up to 60% of their debt costs. Under the Bill (including Government amendments), companies can only claim a deduction for financing costs up to 30% of their tax EBITDA with any disallowed deductions carried forward for up to 15 years. This will result in effectively ceasing plantation forestry expansion in Australia.
AFPA is the peak national industry body representing the growing, processing, and pulp, paper and bioproduct industries covering the forest products value chain. Relevantly AFPA represents the interests of over 90% of Australia’s forestry grower entities. AFPA represents 25 forestry grower companies and government entities, 15 of which are impacted by the Bill. Over 80% of the plantation forestry grower companies are impacted by the Bill and its amendments.
AFPA also represents the majority of large timber manufacturing companies and paper and cardboard manufacturers in Australia.
Plantation forestry expansion is not only a priority for forest growers. Is the number one priority across the entire supply chain, including harvesting contractors, timber mills and paper manufacturers.
Any effect on plantation expansion negatively impacts the entire supply chain including these downstream manufacturers, and severely limits Australia’s future capacity to supply the building industry’s timber needs for housing expansion, limits Australia’s action on climate change and Australia’s plan to replace fossil-fuel-based plastics.
The full submission is available on the AFPA website https://ausfpa.com.au/