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Friday analysis: Victorian Gov’t heaps insult upon injury on forestry operators

Tim Bull

In a tragic case of insult being heaped upon injury, it has now been revealed that the Government of Victoria is offering just 30 cents in the dollar to harvest and haulage contractors who face unemployment at the end of the year.

These are people who 12 months ago were being told by the same State Government that they had another seven years to prepare for the termination of the native timber industry in Victoria.

That deal was of course thrown out the window in May this year and the shutdown brought to December 30 this year.

The initial package being offered to contractors contains only three options;

  1. Enter into a contract to work with the Department of Energy, Environment and Climate Action,
  2. Surrender the contract and receive compensation,
  3. Continue on stand-down payments until 30 June 2024.

But contractors who agree to terminate their contracts before 30 June, will receive just 30% of their contracted rate as a payout.

As Gippsland East Nationals MP, Tim Bull points out, for those who want to consider continued work with DEECA, they have to put in an application to do so.

But the State Government has provided no information on such things as what the remuneration is, what the work is, or where the work will be.

“How can they possibly make a decision on proceeding with this application process without even basic information like whether the income will cover their machinery loans,” Mr Bull said.

He says the compensation is paltry. The Government is offering just 30% of the contracted rate for 2023-24 contracted volume, pro-rata from the date of the agreement.

Let’s see what that actually means.

A timber business with a contract to deliver 30,000 cubic metres to VicForests for $35/m3, could have earned $1.05 million. But if they agree to terminate their 2023-24 contract six months early, on December 31, they will receive 30 cents in the dollar of their full contracted volume or $10.50/m3, but only paid out on a pro-rated basis on the remainder of the year – equal to $183,645.

It doesn’t take a genius to work out how that doesn’t make any sense at all.

Then we have the situation of machinery compensation.

Mr Bull says that at one point of the document the Government says it will pay the difference between the 2020 market value of a piece of plant and current value, which on face value is fair due to the depressed market for timber harvesting machinery.

But the deal doesn’t apply to machinery that is more than 10 years old, despite it still being valuable.

And then the Department reserves the right to pay less than the full difference to meet the available budget for the package.

Mr Bull says this confirms the compensation parameters have been budget driven rather than driven by fairness.

“What the Labor Government has in effect done, is created a glorified grant stream where harvest and haulage contractors are competing against each other in a capped pool for the limited funds available,” he said.

“Labor is forcing them out of work and now asking current employers to pay for retraining of staff.

“You would have to be kidding,” Mr Bull said.

You would indeed.