Private Native Forestry Code of Practice

Mr PETER DRAPER (Tamworth) [1.55 p.m.]: The 2007 Private Native Forestry Code of Practice has proved to be a complete disaster for small hardwood sawmill operators in the electorate of Tamworth. Despite many warnings to the Government, we have seen the closure of long-established businesses and crippling financial hardship, and vital jobs have been lost. Two out of three local sawmillers have either closed, or are in the process of shutting up shop. Despite repeated representations to the Minister there is still no agreement on an acceptable exit package. I ask all Government representatives in the House today how they would feel if their assets were ripped out from under them and they were left with no income, just rapidly rising losses. How would they cope trying to work their way through a nightmare that was not of their own making?

Through four generations, Bendemeer sawmill has conducted small-scale selective harvesting operations, cutting logs exclusively from private property. The total throughput of this mill is no more than 1,500 cubic metres per year. Local landholders who previously supplied the mill with small volumes of logs from their properties have refused to engage under the new code. Because of the new regulations, they are required to sign a private native forestry, property vegetation plan. They have to agree to follow the code's requirements, and also to develop a forest operations plan. Most have formed the view that the complexity of the requirements far exceeds the returns available. What farmer would sign a document making that farmer responsible for basal area retentions, and threatened species prescriptions? When you combine these draconian regulations with the extra scrutiny brought to bear on their farms, it is no wonder they believe the small amounts of income they receive for the timber is no longer worth their participation. As a result, the supply of logs has virtually ceased overnight. To quote from one of Bendemeer mills timber suppliers:

Owing to the complete unacceptability of the Private Native, Property Vegetation Plan, as proposed by the Department of Environment & Climate Change, I must inform you I cannot supply your mill with hardwood sawlogs. Should a complete rewriting of the Act occur I would be happy to again supply your mill

This situation has been exacerbated by local harvesting contractors reacting to the reduction in private property access by going to work for Forests New South Wales, or taking on alternative haulage activities. Only one landholder in the Bendemeer sawmill's supply area has signed a property vegetation plan, but now that landholder has no means of getting his logs to the mill. Bendemeer sawmill has no harvesting or haulage expertise or equipment, and to become involved in such an activity would represent a significant safety risk to employees. To again quote in part from one of the mills contract suppliers:

I have been contracted to supply Bendemeer Sawmill with hardwood saw logs for the past eighteen months. We are sorry to advise we can no longer supply quota logs, due to the fact that we have no landholders prepared to enter into PNF PVPs with the Department of Environment and Climate Change. Landholders have indicated that they don't want Big Brother looking over their shoulders for the next 15 years.

Despite Bendemeer sawmill seeking logs through various sources, including State Forests, the lack of supply has meant it has no alternative other than to close its business. People in Sydney have no idea of the impact this decision will have on the economy in Bendemeer. The mill employs six locals who have all grown up in the town. The mill's closure will force these people to move because the only other employment prospects are in the pub, the store or the caravan park. There are no other businesses in this small community. The mill owners showed me documents from their accountant detailing an annual trading profit of $170,000, yet for some unknown reason this has been "normalised" down to $88,000 to determine the exit package. After four generations of successful operation, the three families who are partners in the business have been offered a combined exit package of a ridiculous $250,000, to be shared between all three families, to shut the doors.

The position of J T Frazer & Co, sawmillers in Tamworth, is even worse. Frazers were forced to close their doors on 22 December 2007 after operating since May 1953. Their manager estimates they lost between $50,000 and $60,000 between August and December as logs became unavailable. As a result, four people have found themselves unemployed. They faced a similar situation to Bendemeer, with property owners unwilling to enter property vegetation plans and contractors packing up and leaving the district. They had to shut the mill due to financial constraints before they could apply for an exit package. The owner has since submitted an application, in February 2008, and he has advised me that he has been offered a ridiculous $14,200 as compensation for his life's work. Naturally, he has refused to accept such a pittance, and he will appeal the decision. Since August 2007 he has lost all his assets. The bank has foreclosed on his home loan, water restrictors have been put on his water supply and the phone has been cut off, all because he has no income. He believes that he has lost at least $100,000 since August last year. He said to me:

These changes have totally devastated my life. This has been my life's work and we've lost everything!

Nothing has been done to provide a future for small hardwood mill operators. The impacts have been devastating in the Tamworth region. These people, who are being forced out through government regulation, deserve to exit the industry with dignity. The Government must act urgently and provide reasonable compensation packages to give these people a future.