Competition, level playing fields and subsidies

log truck

The forest industry in Australia has some serious basic issues that need to be fixed before anyone is going to take the industry seriously.

This is one of them.

It has to do with competition, level (commercial) playing fields, ratepayer subsidies and community support.

In Australia we can have the situation of two forest owners who are neighbours, one of whom pays local Government rates (taxes) on their forest land and the other does not.

One owner gets to use local Government roads to carry logs for free, the other has to pay rates to help maintain the roads. The former gets a subsidy (free roads) from his neighbour (and other ratepayers), to the competitive disadvantage of his neighbour, and any other landowner thinking of growing trees for wood production. Why compete against growers who get to use the roads for free.

And why subsidise these forest growers anyway? Everyone else pays rates!!

It’s an astonishing situation.

And local Governments around Australia are complaining more and more. Here are two recent examples:

Oberon mayor will continue fight for better deal on forestry land

Lithgow City Council joins call to abolish Forestry rate exemption

This can be either a) State forest agencies not paying rates on either native forest or plantation land, or b) privatised former Government plantation owners being exempt from paying rates such as in Queensland.

The Mayor of Oberon says a lot of very good things in that article. Well worth reading.

How can the forest industry hope to gain community support if it treats local communities with such blatant contempt?

Ratepayers should be marching on City Halls around the country demanding action!

Why are Australians continuing to subsidise the forest industry?

How many Australians even realise they are subsidising the forest industry through their local rates?

Not very many is my guess.

No forest companies or State forest agencies tell us if they are paying rates on their forest land. And I bet no local Councils/Governments tell their rate payers if they are subsidising the industry. I went to the Oberon local government website and couldn’t find any mention of the issue. Not even the ratepayers of the Oberon Shire, NSW are allowed to know they are being ripped off!

https://www.oberon.nsw.gov.au/

Why does the forest industry accept these deliberate market distortions that destroy competition, inhibit investment and ultimately destroy the industry’s future?

Growing trees for wood production is a business right? Just like every other primary industry.

Removing these deliberate market distortions would help put the forest industry onto a level playing field. It would help make the industry more competitive and encourage investment.

The only basis for a successful forest industry is profitable (unsubsidised) tree growers.

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5 responses to “Competition, level playing fields and subsidies

  1. Gilles Carrabin

    Thank you for pointing this issue out , like me, most people are not aware of it . I will make a point to bring this issue to the Kentish council…

  2. Hi Giles,
    I don’t know what the situation is in Tasmania.

    Does STT pay rates? I don’t know! Does it matter? They are so heavily subsidised by taxpayers anyway.

    The situation with the privatised pines and hardwood plantations is the same. I don’t know if they pay rates. It would be good to find out.

    Good luck with the Kentish Council.

    Gordon.

  3. PS. Can you let us know how you get on with the Kentish Council please?

  4. Gilles Carrabin

    Hi Gordon,
    I did talk to the mayor of Kentish Council , Don Thwaites. He says that the forestry “enterprises” do pay rate on what the refer as AAV (assessed annual Value ) of the property . this is the raison why ,as they were buying farms properties, they were demolishing or separating any improvements that were increasing the rate.

    • Thanks Gilles,
      “demolishing or separating any improvements that were increasing the rate”. It does sound perverse but I guess as corporate (non-resident) tree growers there is no use paying rates on assets you don’t need.

      By forestry “enterprises” did Don also mean Sustainable Timbers Tasmania?

      Cheers

      Gordon

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