Features Australia

Lost in the enchanted forest

Victoria’s Labor government can't, er, see the wood for the trees

15 April 2017

9:00 AM

15 April 2017

9:00 AM

Ideology rules in the Labor government led by Premier Daniel Andrews in Victoria – from gender-correct proposals for separate inter-sex toilets in state emergency centres, blind support for the heterosexual-bashing Safe Schools program to now the pernicious embrace of the rights of the Leadbeater’s possum.

The small, omnivorous marsupial is on the list of critically threatened fauna in Victoria, however it looks set to add Labor to the endangered species list in regional seats, particularly after its reckless, politically-motivated attempt to unionise the state’s volunteer firefighters.

The saga of the Australian Sustainable Hardwoods (ASH) mill at Heyfield, a Gippsland town with a population less than 2,100, is breathtaking in the incapacity of the state government and its bureaucracy to understand the fundamental economic ramifications of the green-left policies it is seeking to implement.

It also is a metaphor for the government’s arrogance and ineptitude in public policy, where the needs of both business and the community are sacrificed to suit a political agenda. It is not the first time this has happened. The closure of the Hazelwood coal-fired power station, as well as its feeder mine at Morwell, was prematurely forced on the state and the national power grid through a 40 per cent renewable energy target and a tax and policy structure weighted against coal and mining. Even the option of switching to gas to fire its turbines was ruled out because of Victoria’s senseless moratorium on all gas exploration and development – even by conventional means. In the end, the French owner, Engie, ran up the white flag – at the cost of some 750 jobs. Worse the government did this with no Plan B for alternative baseload power. ERM Power founder Trevor St Baker described the Hazelwood closure as ‘a disastrous act of national self-harm’. St Baker told the Finkel Review on energy security the prospect of the closures had doubled forward baseload wholesale prices in Victoria, adding a $1.8 billion-a-year cost burden to electricity consumers. In the case of the Heyfield mill, policies of the Andrews Government have resulted in the forced closure within 18 months of an economically viable operation that employs 260 people, with a devastating impact on the ecosystem it supports. This is broader than just the township; it will impact hardwood furniture producers and outlets affecting the livelihood of an estimated 10,000 people. The mill, owned by Hermal Group, announced in February that it would have no choice but to close the enterprise because of restrictions placed on supply access by VicForests from July this year, when the mill’s contract expired. This was no overnight decision. ASH had been in negotiations with the Victorian government for around two years over the terms of a new contract, as it weighed up an extensive modernisation of the plant it bought from Gunns in 2012.


Essentially the ASH mill needs a supply level of 130,000 cubic metres a year to be viable. The state was prepared to give it only 80,000 cubes this year, and 60,000 in the ensuing two years. The company had hoped for access to around 100,000 cubic metres through a reduction in the number of exclusions zones, but VicForests would not budge on the 80:60:60 offer made in January. ASH even had put forward a plan to establish sustainable hardwood plantations over the next 25 years, but that led to nought. Negotiations to rebadge the plant for smaller quantities or softer timbers also fell through.

Then there is the Leadbeater’s possum. VicForests brought in the rule that there could be no logging within 200 metres of a confirmed Leadbeater’s possum sighting. To protect the possum’s habitat, scores of eco-conscious children from state schools were sent into the ASH forests to record sightings. As a result, realistic access by ASH to even 60,000 cubic metres became impossible.

From here the situation entered the realm of the surreal, even by Victorian standards. With the entry of the CFMEU in support of the mill (and its workers), Labor was put on the spot over the loss of jobs. So Daniel Andrews came to the rescue by suggesting the government would buy the mill if there were no private buyers – even though no sale process had been discussed or established. It was preposterous. Even Monty Python could not script it: a government that is proposing to use taxpayer funds to salvage an enterprise that it had effectively put out of business. It was enough to make mill management spit chips. ASH director Clinton Tilley lambasted Andrews for releasing the company’s decision to close the mill before it had the opportunity to tell staff, and described the Premier’s suggestion of a state buyout as ‘disingenuous’. Four weeks after Andrews’ statement there has been no government offer – nor are mill owners expecting one, and at this stage the redundancies will proceed as scheduled. As one worker told Neil Mitchell: ‘If they wanted to buy the mill, you’d think they’d want to take a look at it first’.

ASH estimates that only 60 of the 260 jobs would be saved if the government maintained a supply maximum of only 60,000 cubic metres. Regardless, a $30 million refit of the mill would be necessary. Simple mathematics establishes this would cost the government $500,000 per job – in addition to the purchase price.

Still, this government has form when it comes to squandering taxpayer dollars. In its first weeks, it committed $1.2 billion of taxpayers’ funds in compensation for breach of contract and other associated costs not to build a major road, the East West Link, which is still regarded as a high-priority infrastructure requirement.

Recently, Labor MPs have amazed with new ways to line their pockets from taxpayer-funded allowances and privileges. Corrections Minister Herbert resigned after he had used a taxpayer-funded car to ferry his pet dogs around, while there is an investigation into possible electoral fraud by the former Speaker Languiller and Deputy Speaker Nardella over secondary-residence allowance claims.

Voters are beginning to join the dots. One reader of the Australian commented online: ‘police are required to sort Mr Nardella out & get $200k of tax payers $ back & use this to save the timber jobs at Heyfield’. The CFMEU has launched a last-ditch effort to keep the mill in operation with 150,000 automated calls in three ALP marginal seats, urging voters to demand action from their MPs. It is unlikely to alter the economic rationale of a move to Tasmania. The loss of the mill, combined with resentment over Labor’s treatment of volunteer firefighters will set the stage for a regional revolt by voters next year. That is, assuming there is sufficient electricity available to power the state electoral office computers…

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