Australia’s National Plantation Strategy Coordinator David Thompson recently made presentations to the WA Minister for Forestry, Terry Redman, the WA Forest Products Commission and industry representatives regarding future wood supplies and plantation investment mechanisms. In part, this was in response to commentary that Australia is facing a ‘wood glut’ under current forestry MIS arrangements, and that there is no need to expand the plantation estate.
Figures on projected Australian sawlog supply from the Bureau of Rural Sciences (BRS), combined with per capita wood consumption and population growth statistics, indicate this is clearly not the case for sawnwood, where future domestic plantation and native forest supplies will struggle to meet demand. If the wood required to eliminate the current Australian housing deficit is added to demand, Australian sawlog supplies will fall well short of total consumption and will therefore have to be supplemented by increased imports and/or greater use of alternative materials.
This situation would be exacerbated with further reductions in access to native forest sawlogs. In the wake of several MIS collapses, discussions were also held regarding additional plantation investment mechanisms, outlining the pros and cons of various public and private arrangements which have been used overseas, or suggested in past policy deliberations.
A number of commentators have sought to use the Report of the Senate Select Committee on Agricultural and Related Industries Inquiry into Food Production in Australia (August 2010) as the basis for criticizing the funding of forestry projects via Managed Investment Schemes. Those making such criticisms have failed to draw a distinction between the behaviour of certain companies and the legitimacy or appropriateness of the tax law, and/or the specific merits of investment in forestry projects. A3P continues to highlight the urgent need for investment to support the replanting and expansion of Australia’s long rotation plantation resource to provide solid timber products to meet the needs of an increasing population and an undersupplied housing market. MIS is the only mechanism that has generated substantial new investment in expanding Australia’s plantation resource over the past decade. Although too little of this investment has been in long rotation plantations, the trend had begun to change in 2007-08, just before the global financial crisis had its devastating impact. Nevertheless, additional mechanisms are needed to attract funds from other sources and to diversify and maximize the investment pool. There are very strong similarities between the drivers and barriers to investment in long rotation plantations and long-lived infrastructure projects.
