Address to Forest Industry Gala Dinner


25 MARCH, 2015


Thanks Ross. Some good news and some bad news - the speeches that Joel Fitzgibbon and Tony Pasin gave earlier used half of my speech notes, so when they were talking about long speeches from lots of politicians tonight there's a bit of relief there. It was very pleasing to hear the talk of bipartisanship. I said this morning at the Forestworks event that that's what we needed to get back to in this industry, that's something that we used to enjoy and I think it's absolutely vital for the future of this industry. Some bad news is that I thought of some other stuff to say.

It's great to be back here in the Great Hall with the forest industry and it's great to see the Great Hall full of people from the forest industry again, like we were last year. It's fantastic, as Ross and Michael said, to be surrounded by sensational Australian timbers and that's what our industry's all about.

It's really great to see that the industry's put in an effort to put on a show again for those in this place and that there is still that strength and passion in the industry. To my 46 colleagues who are here tonight, congratulations to you as well. Can I say to you as an industry? That's a good number to have at an event like this and a real demonstration that there are people here in this place that support the industry and want to see a strong future for it. So that's fantastic, well done.

It's been a pretty big year. I said at the dinner last year that there were some things that we wanted to do. I said that we wanted to have a Parliamentary Friends of Forestry group set up and it was fantastic to see Joel and Tony here tonight, I'm not sure about the hugging bit, but it was good to see them here talking up the importance of the forest industry for this country and the importance of the industry in providing regional employment.

Congratulations to the Latrobe Council for the work that they've done on the Wood Encouragement Policy - that is very good to see. I've had a number of meetings with them over the last 12 months or so and those of us involved in the industry understand that we have the only carbon positive industry that exists. We know that a well-managed forest will store more carbon that one than that's just left to its own devices, the science tells us that. All the attributes that we know this industry can bring, we need to continue to push those for the benefits of our industry and make sure that the community understand that.

I talked last year about the Forest Industry Advisory Council (FIAC) and Prime Minister Abbott announced Rob de Fgely as the co-chair of FIAC last year. Rob has done a sensational job in co-chairing that and I'd like to thank him for his work in that role.

When we announced FIAC it was a real departure from the way that we had done things previously and I have been absolutely delighted at the effort that the people sitting around the table in FIAC have put in the meetings we have had so far. They are very busy people that have significant roles within the industry, but they have given their time and their knowledge most importantly, for the benefit of this industry and I would sincerely like to thank them for that.

The other thing that I said that I wanted to work on was the development of a policy paper given that forestry wasn't included in the Agricultural White Paper process. The thing that really gives me an enormous amount of pleasure to do tonight, is to launch the issues paper as a part of that process. So it's effectively the green paper part of the white paper. So tonight we're launching this document which is I think hidden under those white sheets there - Meeting future market demand: Australia's forest products and forest industry. The document is all about getting this industry to look forward.

We talked about that last year and we talked about this industry looking towards the future and one of the things that I discussed in the meetings of FIAC is that we don't want this industry to look at its future through the rear-view mirror as we get too narrow a view. We know from the things that are happening internationally that this industry is going to be much more than it has been in the past, we know because it's been starting to happen.

I mentioned last year the opportunities that exist around high value cellulose based chemicals. That is coming to a reality in Australia today. We talked about CLT and the opportunities that exist there. I've had three large businesses talking to me in the last six or eight months about $60-$100 million investments in the forest industry in this country and that is good news.

To hear that employment in this industry has increased by about 10,000 people over the last 12 months is really heart-warming because we've been told by those who don't support us that we're a sunset industry. The reality is the forest industry is actually the sunrise industry in respect of natural resources. It's a carbon positive industry because everything made from timber becomes a carbon sink. There is real value in that. The science, as I said before tells us that if you manage a forest you'll store more carbon than you will if you just leave it in an undisturbed state. There's a whole range of values that we can put in place.

It's really pleasing to be actively engaged with the states on the review processes for the regional forest agreements (RFA). This is a very important part of ensuring our resource into the future and part of that discussion is obviously making the regional forest agreements a 20 year rolling agreement so that there is an investment horizon for industry to have the confidence to continue to invest in the industry, and that is absolutely vital. There are a couple of them with only a couple of years left, but I have to say it's really pleasing that the states all of the states with RFAs are quite eager to engage with us at the moment about the review of that process so that they can get into a situation where they have that 20 year horizon in front of them for the future of the forest industry.

The other thing that we're working on as part of the review of the renewable energy target is the removal of the prohibition of biomass from qualification for renewable energy certificates. Because we all understand that for this industry to be economically viable you need to be able to sell everything out of the tree. It's a simple and basic economic fundamental. That particular provision was put there specifically to undermine the economics of the industry and we're determined to turn that around.

Can I go now to the specifics around the discussion paper, it will be released tonight obviously for public comment for the next 10 weeks and you as an industry will have the opportunity to have your say and there are questions in the paper that actually deal with a number of the issues that we're talking about. It's deliberately focussed on the future and looking at the future.

I've seen some research that talks about significant growth in global demand for forest and forest products over the next 10 to 60 years. If that's true, given the life cycle of the product that we utilise in this industry, those trees need to be going into the ground now if we're going to actively take part in that process. For those of you who are utilising the existing resource right now, that additional competition is something that you'll need to consider in looking at the viability of your resource and the availability of your resource into the near future. So this becomes really important.

So we look at markets and market pressures, domestic and globally we can't just look at this industry here in Australia based on just a local market. We are part of the global market and a global environment and we have to look at it in that context and it's something that's so pleasing for me to see when I visit businesses who factor that into the basis of their economic plan and the way that they're looking to develop their businesses.

Emerging uses and markets, and I've talked about that, cellulose biased chemicals, biofuels, biochemicals, nanocrystalline cellulose we talked about last year and the possibilities that go with that and the development of industry, and also engineered wood products and there are a number of new products starting to come through the system.

Of course the forest resource, that's part of the work around the RFAs but it's not just about the native forest, of course we need to ensure that we have the resource for those that are using a plantation based product and we've got a couple of million hectares of forest in this country and we had a target under the 2020 vision but it doesn't look like we're going to meet, but how do we actually meet that and how do we integrate that back into the landscape. We're doing some work in relation to that and it might mean a slightly different business model. It might mean working more cohesively with the farming sector to ensure that resource gets placed into the landscape, but if it's not put there we've got a resource problem.

Of course innovation, research and development are really important, we've spoken previously about the work that's been done in Canada with FP Innovation and in New Zealand's Scion and we really do need to catch up. We've had a debate here over the last 12 months about the investment in research and development in this country, particularly in the forest industry and how we manage that and take it into the future.

Very importantly, consumer and community engagement is a really important factor. We've talked about the values that this forest industry brings and the values that it can provide to the broader community. We need to be engaged more broadly so that they understand that.

One of the things that I was really pleased to participate in just last week, was an event that incorporated a number of people in resource based industries - farmers, fishers, foresters, miners talking about how they engage in the community. A really interesting thing that the National Farmers' Federation are doing is looking at harnessing their base and that includes I think people in the forest industry, into a force that can compete with those who use social media particularly to campaign against us.

They're looking at being able to call on that mass of people who rely on the forest industry, the farming sector or the fishing industry for the livelihood, to come out in support of each other at the appropriate time. This is a really important development I think and it's really pleasing to see that those sectors are sitting down at the table and working together because the thing that they all want is access to the resource. That is the important thing and that's the one thing that they're all looking for and it's important they're organised in doing that because as we all know there are forces out there that don't want to see that.

Also strengthened regional approaches, there's a vast resource out there and it varies but there are what I think you could term timber baskets or regions out there around Australia that are readily identifiable and potentially could be developed to focus on the industry. They are made of communities like Latrobe who see forestry as an important part of their overall makeup. I think that's a valuable thing for us to consider as part of the broader policy development process.

Also, the infrastructure that supports that, we know that unless we have good infrastructure to get our product to market, cost effective and efficient infrastructure, we can be the most competitive industry in the world but if costs us too much for our logistics it puts us out of the game. I had a conversation at the table about just that tonight. It's actually cheaper to get product from New Zealand to every port in Australia than it is to take it from Tassie to Melbourne. That's absurd that our coastal shipping regulations put us in a situation where the South Australian forest product industry can't access the booming Queensland housing market because shipping costs just are too expensive and it puts them out of the game. We need to sort that out and then to also build the infrastructure that supports it.

And of course the thing that we as members of Parliament always like to focus on is employment, so skills and training to support the growth of the industry. With 10,000 jobs in the last 12 months that's a real pressure on the infrastructure and the skills in the industry and it's important that we have the capacity to provide for the industry in the future in that context.

Earlier in the night Joel and Tony talked about bipartisanship and I've talked again about how important that is for the industry. We know the contest of ideas is eternal and will always go on and there are those that don't believe in some parts of this industry, that's their right and that's fine. The document that we're releasing tonight is about developing and proposing a strong bright future for the industry, it's about providing a level of confidence so that we can see a return of investment and turn around the attitude of some of the finance institutions that have been reluctant to invest into this industry.

Yet just this afternoon I've received a motion wanting to run another 12 month witch hunt into the forest industry to go through the Senate tomorrow. Can I say that if any of you don't want to see another witch hunt into the forest industry, you are perfectly placed tonight to let your elected representatives at your table know that this is not the way to go. The opportunity for bipartisanship actually starts tomorrow when that motion comes to the senate. I think the last thing that this industry needs right now is a 12 month witch hunt. That's the least thing that this industry needs right now. So I will leave you with that thought, I think you get an indication of where I'm coming from as part of this process.

The IPCC, the FAO and our really well credentialed forest scientist talk about the best way to conserve is to manage it sustainably and we do that. We've got 125 million hectares of forest in this country and 22 million of that are covered by RFAs, under those we have access to about 9.8 million of those. By the time we take out reserves and things like that you're about 6.8 million hectares and we harvest at less than 1 per cent of that. Of course the forests regenerate and we can continue to cycle on and on.

This is a great industry and I think it's got a great future and it should have a great future. Make sure your representatives at the table understand your views about that tonight and let's hope we get the right result tomorrow. Thank you.

250315 Address to Forest Industry Gala Dinner
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