timber and forestry e news issue 329
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1ISSUE 329 | PAGE
CONTINUING Australias remarkable run of economic growth will require businesses and governments to take more deliberate and purposeful steps in response to global forces of change, Business Council of Australia President Catherine Livingstone said.
Ms Livingstone used her fi rst major speech as BCA president to launch a landmark paper that recommends a radical rethink of how Australia understands its economy and plans for wealth creation.
The paper, Building Australias Comparative Advantages, is supported by research undertaken by McKinsey & Company that provides a baseline
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CSIRO losing focus .. I can just see the remnants of forest research.
Australia losingcompetitive edgeReport reinforces madness ofCSIRO cuts to forest science
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Forestry wary of waterplan in South Australia
Rapid growth .. Laurie Hein of Green Triangle Forrest Products inspects bluegum plantation in Mount Gambier.
Industry treated unfairly: FWPAIN an Australian first, parts of South Australias forestry sector will now be accountable for the water used to grow trees.
The requirement for commercial water licences will apply to bluegum and pine plantations in the southeast corner of the state.
Australian Forest Products Association CEO Ross Hampton believes the forest industry is being treated unfairly. He says the water licensing policy introduced by the South Australian government is based on artificial evidence.
Forestry companies in the lower southeast will be required to buy water licences, as part of the states plans to ensure sustainability of the resource.
It has taken the government nearly a decade of work to introduce the policy.
AFPA agrees a licensing system is needed but rejects the science underpinning the government scheme.
There are some understandings that we think are wrong around the way that forests intercept water, Mr Hampton said.
When you plant a tree you know that trees use more water when waters available and they dont use as much water when the water isnt there.
So it doesnt make sense to create this carte blanche view
that has taken a very high view of what the water used by forests is.
This is a terrible blow really to all of those businesses that rely on their raw material of forests.
AFPA believes the state government has come up with an artificially-inflated valuation for their water licences.
Meanwhile, Professor Jennifer McKay of the University of South Australias law school says the water scheme is world class and based on a wealth of evidence.
There was a very good study done by CSIRO, like in the 80s, and that was followed up by some more recent studies, she said.
Having forestry account for its water use in any water region is a fundamentally sound principle.
Years of controversy, division and failed managed investment schemes have finally turned to prosperity for the Tasmanian bluegum industry in the states southeast as export demand for woodchips rises rapidly.
Boosted by heavy Chinese buying, the harvesting of bluegums in the Green Triangle region of South Australia and Victoria has increased revenue
from $75 million in 2012 to about $170 million last year, rising to an estimated $250 million this year.
The whole community is benefiting as jobs rise rapidly in harvesting and hauling companies, at fuel suppliers, mechanics and tyre suppliers, as they all benefit from the rising fortunes of the industry.
Behind the rapid growth is demand from China to make fine writing, copy and tissue paper, to make rayon for nylon shirts and cellophane wrapping paper and to produce high quality cardboard for perfume and cigarette boxes.
Green Triangle regional plantation committee chairman Laurie Hein said the Tasmanian bluegum industry had been transformed from doom and gloom to a vibrant forestry sector, creating jobs and a rising sense of optimism.
The need for harvest contractors, freight companies and other service providers along the whole supply chain had risen strongly in the past year as the level of harvesting had risen substantially to meet the Chinese demand, Mr Hein said.
We are seeing a return of confidence and a steady increase in harvesting due to excellent demand from China, although prices are still not as good as wed like to see, he said.
Bluegums benefit community
3ISSUE 329 | PAGE
perspective of Australias international competitiveness by sector, and an insight into where we can succeed at a global scale.
What we have found is that across a range of measures, most of our industry sectors are not competitive against the United States a country still viewed as being at the forefront of productivity and innovation, Ms Livingstone said.
Australian Forest Products Association CEO Ross Hampton said Australia had been crying out for such a report.
These findings reinforce the absolute madness of the CSIRO choosing to effectively axe its forest science capability as it searches for budget savings, he said.
The forest products industries of Australia employ 80,000 people, most in regional communities. In a carbon-constrained global economy which is rapidly rediscovering the advantages of renewable timber and fibre, Australia must back our comparative advantage and not back away.
He said McKinsey discovered that agriculture (which McKinsey says includes forestry and fishing) is the absolute standout leader in terms of competitiveness, skills and natural endowments, and has massive potential to add jobs and growth to the nation.
In McKinseys terms it is an advantaged performer, Mr Hampton said.
Ross Hampton added: Balancing the budget by
removing forestry research capacity in CSIRO is far from visionary; it is contrary to everything the McKinsey report recommends.
As this report says, Australia faces a stark choice. It can take a purposeful path to regain its competitiveness, or risk a painful correction.
A step on that purposeful path is for the government to tell CSIRO that it makes no sense to lose its last 33 forestry scientists to competitor nations such as Chile, Vietnam, China, Canada and New Zealand.
McKinsey found that Australia was strongly competitive in only one sector agriculture. However, it found that Australia had a substantial comparative advantage in other sectors with flat or diminishing competitiveness, including mining and LNG, tourism and food manufacturing, highly differentiated manufacturing,
and international education.The BCA looked at these
findings and saw enormous opportunity, Catherine Livingstone said.
But only if Australia changes its mindset to acknowledge that the unstoppable forces of globalisation and technology have shaken up forever what it means to be competitive at a world standard.
She said Australia had recorded average annual economic growth of 3.4% over the past two decades, driven by structural policy reforms and a rise in its terms of trade.
But we cannot continue to rely on these factors, she said. Maintaining growth in the next decade will be a much harder task than it was in the previous two decades.
If Australia is to stay competitive and support jobs and prosperity, then policy must be more focused on the specific requirements of each sector of our economy to maximise their comparative advantages.
Ms Livingstone said, balancing the budget is not a vision: it is a means to an end.
Business has a huge role in responding to the forces
Balancing the budget is not a vision
Senseless to lose last 33 forestryscientists to competitor nations
Dr Megan Clark .. chief executive of CSIRO.
Catherine Livingstone .. enormous opportunities.
Ross Hampton .. rediscovering the advantages.
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We help grow Australias productivity through excellent science that provides a positive impact for Australia every day. Case studies show how we have applied our research to challenges, improving lives, creating wealth and ongoing benefits to society. CSIRO website
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