Taxpayers are forking out at least $40 million to buy the beleaguered Heyfield timber mill in Gippsland, with the existing management becoming a shareholder along with the Victorian Government. Source: ABC News
The Government has finally signed a deal to buy the business, after Premier Daniel Andrews made the extraordinary decision to buy the mill in July.
Under the arrangement, Australian Sustainable Hardwoods will continue to operate under the ownership of the Government and a shareholder group made up of the mill’s management.
The Government has not said how much taxpayers have paid to buy the business but it is understood at least $40 million has been paid.
The previous owners threatened to close the plant after the state-owned VicForests provided a smaller-than-expected timber supply to the business, due to dwindling supply from the environmentally and politically sensitive central highlands.
The decreased supply was due to areas of native forest being locked up because of Leadbeater’s Possum protection zones and bushfire damage to suitable forests.
The mill processes mountain ash hardwoods, and the owners said the supply offer was not viable to keep the business running.
The Hermal group, which owned the mill, wanted a supply of 150,000 cubic metres but only 80,000m3 was offered.
Up to 250 jobs were at risk and there will still be job losses under the Government bailout.
The Andrews Government believes the business can operate on a smaller supply and, with the mill sitting in already under- pressure Gippsland, it decided to buy the business.
Employment Minister Wade Noonan will oversee the transition and the establishment of a new corporate structure.
Mr Noonan said Labor was fulfilling its promise to stand up for local jobs.
“We have secured the future of this mill — saving jobs, protecting the timber industry and ensuring the local Heyfield economy is supported into the future,” he said.
Conservationists have railed against logging in the central highlands and have recently argued the forests are critical to Melbourne’s water supply and the Yarra Valley tourism industry.
The industry has argued for more timber to be made available, including by reducing buffer zones for possums.
The Opposition accused the Government of misleading the people of Heyfield due to mixed messages abut how many jobs would be saved. Local MP Tim Bull said the Government should open up more timber supply.
“These jobs wouldn’t have needed saving if Labor hadn’t refused to guarantee a viable timber supply,” he said.
“Daniel Andrews is so desperate to secure Greens preferences and the seats of his inner-city MPs that he is willing to sacrifice those in our east Gippsland communities.”
The decision to buy the mill prompted environmentalists to call on the Andrews Government to create a Great Forest national park.
The Wilderness Society said now the Heyfield matter was resolved, the Premier should turn his attention to the environment.
“The Andrews Government was elected on a platform of delivering outcomes for forests, workers, industry and wildlife,” its spokeswoman Amelia Young said.
“The Wilderness Society has been repeatedly informed that uncertainty over the Heyfield sawmill was preventing action on protecting forests.
“Now that the Heyfield sawmill sale has been finalised, Premier Andrews must immediately commence a process to create new national parks in this term of office.”
The Victorian Association of Forest Industries chief executive Tim Johnston welcomed the Government’s move.
“The forest, fibre and wood products industry is the lifeblood of many rural and regional communities across Victoria,” he said. “It is a $7 billion industry that employs 21,000 Victorians and supports another 40,000 to 50,000 local jobs, many of these in regional areas.”
