The South Australian government has abandoned talks with Carter Holt Harvey, retracting a bailout package of $27 million that will now be diverted to the industry at large. Treasurer Jack Snelling will announce that the funding would be offered to timber processors who matched the government’s investment on a one-to-one basis. Source: The Australian
However, it will be restricted to companies that have contracts with the successful buyer of the government’s forest rotations, Onefortyone Plantations.
The move comes after timber giant Carter Holt Harvey rejected the bailout funds offered to offset sawlog prices set by government agency Forestry SA.
Carter Holt Harvey had argued that the high saw-log price had made its business uncompetitive, with up to 1000 jobs at risk at its processing plant in the state’s southeast as a result.
“Despite months of good faith negotiations, Carter Holt Harvey could not reach agreement with the government on any assistance,” Snelling said.
“We have therefore decided to create a South East Forestry Partnerships Program of up to $27 million which will provide a short-term stimulus to drive long-term investment into the forestry industry.”
The government said applications for funding would be assessed based on their “strategic importance” for the state’s forestry sector, which would be used to “retain or expand regional timber processing” and jobs.
Construction Forestry, Mining and Energy Union district secretary Brad Coates has said that a $27m industry bailout would not be adequate to sustain the sector, saying structural issues, including the high Australian dollar, required a more strategic approach.
The region has been reeling from Forestry SA’s sale of forward rotation rights, and the recent departure of Gunns from the region, leaving the fate of the Tarpeena sawmill in doubt.
The sector directly employs about 4000 people and accounts for about 40% of the South East’s economic activity.
