ADDRESS TO FOREST INDUSTRIES FEDERATION DINNER IN WA

MARCH 7, 2014

E&OE.......................................................................................................

Thanks very much, it's good to be here and it is particularly good to be here in government rather than in opposition. It's a great feeling being able to do things rather than just chirp from the sidelines and hope that the government takes notice of some of what you're saying. It is very satisfying.

I would like to acknowledge my parliamentary colleagues here tonight. To Minister Mia Davies, good luck in the portfolio, it's a great portfolio to be participating in and I look forward to working with you and with your state issues and how they might interact at a federal level. There's plenty to do and I really look forward to working with the Western Australian government here to achieve that.

The Coalition is now implementing the forest policy we took to the federal election. The issue of resource security is probably the fundamental issue for the forest industry. You have to be forward looking in this industry more than any other as the cycles that we're working on are generational and long-term. The thing that concerns me at this point is the availability of the resource into the longer-term. Just today out at the Wesbeam factory they were talking to me about their resource and the fact that it's shrinking and where that might be longer-term is a real concern.

On the plane coming over today I was thinking about how it is almost portrayed as a bad thing to cut down a tree. I was talking to some journalists the other day in Canberra and their attitudes were that trees should be left alone. That's what we're dealing with in the broader community context. They hear somebody from the environment movement talking about that and they just naturally pass it through to the community that are listening to them.

I think there is a bit of a change of perception coming through and I saw that yesterday with an article in the Sydney Morning Herald (SMH) following the Prime Minister's speech in the Great Hall of Parliament House on Tuesday night. The Prime Minister said we've got enough national parks, perhaps too many, and of course the media went absolutely troppo. They said how dare somebody say that there's too much forest locked up. Well we've been saying that in Tassie for a fair period of time and I'm presuming there are a few over here who have a similar perspective, but for the Prime Minister to say something like that was quite momentous.

There was a poll in the SMH that had 118,000 respondents to the question 'is Tony Abbott right, do we have too many national parks?'. Now you would think that the forest industry should look on that question with a bit of trepidation but the result was very clear, 83% of respondents said yes, Tony Abbott is right. Now for that to appear in the SMH is quite something - 16% of respondents said no and 1% of respondents were undecided. I'll take 83% saying Tony Abbott is right any day.

What underlies that is that there is a strong forest community in NSW. I met with some of them yesterday and they said "yeah we saw that poll and we weren't going to let them get away with it". So they used their network to get involved and now the perception that is projected via that survey, even though it's only an online poll, is that there is strong support for the Prime Minister and his suggestion that there are enough national parks. 83% is an extraordinary number out of 118,000 respondents. That is a big number.

So the conversation we were having with those guys from NSW was how we use our communications and our networks to get the message across. And the answer to that is that we need to participate, we need to be connected, and we need to be prepared to stand up when we are required to. It might only be pressing a button on the computer or participating in an online poll but if enough people continue to do that and if enough people participate in the Facebook page and all those Facebook pages and networks are connected, this industry has a really strong powerful community. There is an opportunity for us now to develop some social network skills on a national basis and I think we can really start to turn things around.

The Prime Minister has given us the go ahead by saying that enough is enough. Hopefully there will be a good result in eight days' time at the Tasmanian election where the Liberals down there have said enough is enough; we're not locking any more forests up and in fact we're taking back some of what you have locked up. The basis for all that is about sustainable supply. We need to have a strong supply into the future to meet the demand from the community for the product that we produce. Everybody loves our product but some get squeamish about the way that we get to it, that's the problem.

I can tell you the environment groups are a bit squeamish at the moment. I publish a photograph every day that shows clear-felled coupes inside new Tasmanian Wilderness World Heritage areas and they are not overly impressed. So using their language against them is a really valuable tool.

The other thing I think we ought to be doing is communicating to the broader community in the terms in which they are listening. What are the values that our industry brings that the community are looking for? We know, because the science has been done internationally, that a managed forest will store more carbon than one that's left static. Over 200 years if you take into account the carbon stored in solid timber products and substitution from petrochemical products, you'll store almost double the carbon in certain types of forest than just leaving it static. Now that's a significant value that the community is looking for. We ought to be taking advantage of that.

The utilisation of timber as opposed to steel and concrete in our homes and building is certainly a value that we ought to be talking about. Now whether we go Wood First or not is another question but we ought to be encouraging the use of timber. 40% of every piece of timber is carbon, so we're storing that in all our homes and buildings and furniture. We should all be taking advantage of that message.

As part of providing that long term supply to the industry, one of the criteria we're looking at in Western Australia is tenure. We're going to turn our regional forest agreements into a rolling 20 year agreement, so as you complete a five year review you get five years on the end of it. We're doing this so there is long term tenure and you do have an investment horizon and that is really important. If you don't have an investment horizon it will dry up. We're not far from the end of the regional forest agreement here in Western Australia and the same at home in Tasmania and it will dry up because people can't see that important future.

One of the phone calls I got this week following the Prime Minister's comments on Tuesday night was from the ANZ bank, asking what was going on. The big investors are taking notice of what's being said about the forest industry and that's important because in some areas of the forest industry they've decided to take it back a step, in my home state of Tasmania they've decided to stay out, and that needs to turn around. We need to provide that surety of resource, surety of supply and long term horizon so that investment can return to the industry.

Forestry is an industry that is really exciting and there are enormous opportunities at the moment. As I said on Tuesday night, I've spoken to the airlines about a source of cellulose for them to provide surety of supply for aviation fuel. Now when you get Qantas and Virgin in a room talking about something that they've got in common it's a pretty big deal at the moment. But you've also got Emirates and all the others lined up.

In the United States their military are looking for biofuels based out of cellulose as a source of jet fuel for the military. They're actually mandating that you have to have that level of surety of supply.

I've also spoken to companies from Italy talking about high value chemicals out of cellulose. And you've also seen what's happening in Canada at the moment where nanocrystalline cellulose is being developed and that's right at the very leading edge. General Motors are talking about 30% of a motor vehicle being replaced with materials coming out of wood supply and so the demand for the product is going to become quite significant.

One of the things that we really need to do in this country is turn around the attitude to the forest industry because we are sitting completely opposite to what's happening in the rest of the world. In the Northern Hemisphere, in Europe, Canada and the United States, they're looking at things very differently. I was at a forest conference in NSW just after the election and I met a guy who has just come out from Greece and he asked me what is going on here. He said nobody in Australia likes the forest industry and asked me what is going on. In the Northern Hemisphere they're looking at the industry in a completely different way to what we are in Australia at the moment and so we all need to play a part in that. We all need to be prepared to stand-up when we hear something completely dopey being said about this industry and set it straight.

The example that I use for that is an organisation called Croplife, they represent the big agricultural chemical companies, and when the environment movement gets up and says something that is wrong they put the record straight immediately. We have to be able to do that.

I know that industry is feeling awfully beaten up at the moment. It was really tough during to the global financial crisis and all the things that came along with that but we cannot afford to be in the frame when it comes to public comment. It's been very difficult in opposition because it's a pretty lonely place and I've even had media say to me if you win government what you're saying might become relevant. But I felt a lot better on Tuesday night when the Prime Minister said what I was saying was relevant. That's really important for the industry.

So the commitments that we made at the election we're starting to roll out. We put $15 million into a national bushfire mitigation strategy. The forest industry potentially has an enormous part to play in that. AFPA published a paper the week before last that really gives some good demonstration of the opportunities now, but also reduction in cost to the community.

I mentioned on Tuesday night another thing I think is worth really considering, and it's just a classic example of what we're been doing over the last 15 or 20 years, is turning what should be a public asset into a liability. That was the example of what's happening in the River Red gum forests in New South Wales, where there is 400 hectares that was converted to national parks just before the Labor Party lost Government in NSW. They're now spending $3,750 per hectare across those 400 hectares for environmental thinning.

Why not put a management plan across that area to do exactly the same thing in a commercial sense? If you were to do that based on 2011 numbers you'd earn $5,000 a hectare. You could actually put that money back into looking after another area where you wanted to have a national park, if you wanted to, but you could also be supporting the community. The IGA's closing down and one of the pubs closed down. They were told they'd get a huge spin off from tourism but the only problem is you can't go camping in a national park. It really is time we got some common sense back into forest policy in this country and that's one of the things I'd like to do during my time in the portfolio.

We need to ensure we have a strong plantation resource going forward because we really do look down the barrel of seeing that significantly diminish over time as some of the areas that were put in through managed investment schemes don't get replanted. As I've heard today and there is general discussion across the country, the pine plantation estate really hasn't grown at all for a number of years, in fact it's starting to recede. Given the demand we see coming for timber products in the future we really do need to make sure that we maintain that resource and we need to find a way to ensure the regeneration continues to occur, it's going to be really important.

That's the platform that I would like to lay during my time in the portfolio. Of course the other thing is working pretty much every day to work on the public perception of the industry, which if you're looking at regional development, I'm not sure if I know of a better industry in respect of supporting regional communities.

We know what a devastating impact it has when you remove the forest industry because you've seen it here in your communities and I've certainly seen it at home in Tasmania and the example of what's happening in the River Red gum region in NSW is a graphic example as I've seen, where you've turned what should be a public asset into a liability. It's absolutely absurd that you could be earning a reasonable return on a very sustainable basis and yet by locking it up you end up having to spend public funds that could be going into police, health and education, on maintaining and managing a resource or mitigating the cost of intense forest fires. It just doesn't make sense.

I think when you start putting it back into that context and communicating back to the broader community that's what you're doing, we can start turning around some of the community attitudes.

Thank you for the invitation tonight to be here. It's really good to be back in Western Australia and I look forward to working with you as a new minister and the rest of you as a forest community and forest industry and businesses on the growth of the industry in Western Australia and nationally. Thanks very much.

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