Victoria’s state-owned logging business is on the verge of being dismantled and absorbed into other areas of the bureaucracy after the state government reclassified it and announced a review of its operations. Source: The Age, Timberbiz
VicForests has been under financial pressure after recording a $52.4 million loss in the 2021-22 financial year, blaming legal battles that had stopped it from logging and forced it to pay compensation to clients for missed orders.
The government-owned business harvests, sells and oversees the regrowth of timber from Victorian state forests. Its future became uncertain in May when it was announced that native logging would be banned from January 1, 2024 – six years earlier than planned.
On Wednesday, the government altered VicForests’ status as a state business corporation and made it a “reorganising body”, which allows its functions and staff to be moved around.
The move paves the way for the business to be split up and absorbed into different government departments.
In a letter to the Community and Public Sector Union, the Department of Energy, Environment and Climate Action said there would be no “direct changes” to staffing.
But it also included detailed information about job support for VicForests’ staff, including access to an online portal to apply for other roles in the public service and to receive new training.
“VicForests will keep operating as is until a formal decision about the future of the entity has been made,” the letter said.
“DEECA is currently working with VicForests to review its functions and activities, including consideration of how the critical skills of VicForests staff can be maximised.
“This work will help develop a better understanding of VicForests’ operations and obligations and inform the decision about the organisation’s future expected later this year.”
The union has previously pushed for certainty for staff as they have waited for months to find out whether the business will be wound up and their jobs will continue.
A state government spokesperson said no decision had been made about the future of the organisation and cited a Supreme Court ruling that had held up logging bans across the state.
“This transition removes VicForests’ commercial focus and reflects its changed operating environment following the Court of Appeal decision in June 2023,” they said.
But opposition agriculture spokeswoman Emma Kealy said the state was winding up the business.
“Labor is pushing ahead with their plan to close the sustainable timber industry early,” she said.
“Labor has put politics ahead of good environmental outcomes and strong futures for local workers and their communities.”
Gippsland East Nationals MP, Tim Bull, said it was alarming that a government department has to undertake a “review” into the functions and activities of another arm of government and its staff.
“Did they not know the work they did? What a waste of time and taxpayer money,” Mr Bull said.
“While many have been working hard to get answers for the mill workers, contractors and those businesses involved in the industry, we should also not forget about the VicForests employees, who are also part of our community, know this is a sustainable industry and are facing similar uncertainty.
“This is what happens when you have Ministers in charge of portfolios they know nothing about and they refuse to come out and talk to workers in these sectors,” said Mr Bull.
When announcing the earlier-than-expected closure date in May, the Andrews government said timber workers would be supported to find new jobs and that their skills would be needed in areas such as forest management and bushfire-risk reduction.
At the time, Treasurer Tim Pallas said the decision was made after receiving legal advice that the government could not legislate to prevent the regular legal disputes that VicForests had lost against conservation groups.
Multiple court battles severely restricted the business’ access to the timber coupes it used to supply customers and meant it could not honour contracts, which contributed to its $52.4 million loss.
This led to a shortfall in native timber that prompted Australian Paper’s Maryvale Mill in the Latrobe Valley – the last in the nation – to shut down its white paper operations.
The government has expanded its support package for the industry, but some timber contractors living in regional communities have already been forced to find work interstate.
