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Tasmanian Forests Agreement: liberal society needs an alternative

Fred Gale’s article, Tasmanian Forests Agreement: deeply flawed, worth backing, provides interesting insights into the views of one segment of the Tasmanian community that supports the Tasmanian Forest…

Any agreement to end the forest ‘wars’ should neither prop up a failing industry nor shut down dissent. AAP Image/Matthew Newton

Fred Gale’s article, Tasmanian Forests Agreement: deeply flawed, worth backing, provides interesting insights into the views of one segment of the Tasmanian community that supports the Tasmanian Forest Agreement. However, he fails to fully grasp many of the fundamental reasons for continuing opposition to the deal and its associated legislation. Most notably, there is no room in Gale’s analysis for liberal perspectives.

While there are many different forms of liberalism and diverse views on the legitimate role of the state, there is a common presumption throughout liberal political philosophy in favour of freedom of choice. When faced with a policy issue, liberals traditionally start by asking whether the state should be involved. In seeking to answer this question, they will presume that governments should neither prohibit, nor encourage, any behaviour without a darn good reason.

For liberals who judge the morality of actions on the basis of their consequences (and most mainstream economists fall into this camp), the subsidies offered through the forests agreement raise a red flag.

Under the deal, the Commonwealth will provide a total of $350 million to Tasmania. It will be used to “restructure” the forestry industry, compensate displaced forest workers, pay out forest contracts, subsidise regional development projects and help establish and manage the new reserves.

The details of how this money will be distributed are still sketchy but the available information suggests that the forestry sector will receive around $70-80 million in direct subsidies. A further $90 million will be provided for “economic diversification projects” outside the forestry sector.

As any economic textbook will tell you, subsidies usually cause inefficiencies. In most cases, they increase the supply of the subsidised good or service beyond the level that is efficient and, in doing so, reduce social wellbeing (or welfare).

The native forest sector has been in decline for the better part of the last 20 years. Real prices for most native forest wood products have been flat or falling, costs have been rising, and both domestic and international competition has been increasing. Since 2008, the deterioration of the sector has accelerated because of the global financial crisis, increased woodchip production from Southeast Asia, the appreciation of the Australian dollar, and declining Japanese paper demand. The state of the sector in Tasmania is so bad that, without the subsidies provided under the agreement, it would collapse (a point that has been acknowledged by the Australian Government, Tasmanian Government and the forestry industry).

Given the state of the sector, any reasonable liberal would be inclined to ask why the native forest sector, of all sectors, deserves government subsidies.

In Tasmania, it employs fewer than 2000 people (around 1% of the Tasmanian workforce) and, in a good year, contributes between 1-2% of gross state product. It relies on subsidised logs provided by Forestry Tasmania (over the last four years Forestry Tasmanian recorded a net loss before tax and other items of around $16 million per annum), subsidised plant and equipment for processors, and even subsidised electricity supply for major producers like Ta Ann. Without these subsidies, it would be uncompetitive and go the way of the whaling industry.

Moreover, by propping up the sector and ensuring its continued survival, the forests agreement will add around 2 million tonnes of greenhouse gas emissions to Australia’s emissions accounts every year until at least 2020. This will cost federal taxpayers around $50 million annually in lost carbon revenues or direct action spending.

Gale talks about “different visions of Tasmania’s forest future” as if Australia has a centrally planned economy in which the forestry sector is shielded from market forces. For those who missed it, Australia is a liberal democracy with an open and flexible market economy. As applies in most other areas, if the forestry sector cannot stand on its own feet, it should be allowed to fall. The only role the government should play in this process is to help workers find alternative employment.

From a liberal perspective, the subsidies are only part of the problem. The other issue with the agreement is the way it was negotiated and plans to enforce it.

The agreement was a product of a three-year, closed door negotiation between representatives from the forestry industry and three environment groups: the Australian Conservation Foundation, The Wilderness Society and Environment Tasmania. While the deal ultimately had to go before the Tasmanian Parliament, and there was a hurried inquiry undertaken by the Tasmanian Upper House, it is startling that, in a representative democracy, governments could formally deputise a gaggle of unelected lobby groups to develop policy on the community’s behalf.

It its Blueprint for a Sustainable Australia, the Australian Conservation Foundation talks of the need for participatory decision-making process, saying “participation in decision-making is an essential ingredient for a truly democratic and open society” and that, in the absence of participation, people will feel alienated. It should have read its own brochure more closely.

The final and arguably most egregious component of the agreement from a liberal perspective is the “durability” provisions.

Freedom of speech and political communication are fundamental to liberal philosophy and an essential part of a representative democracy. Neither freedom is absolute but, in a liberal democracy, there should be a strong presumption that any attempt to burden these freedoms will not be permitted unless it is absolutely necessary and done in a way that is proportionate to the need.

Under the TFA legislation, a “Special Council” made up of representatives from the forestry sector and the anointed environmental groups will be established. This Special Council is required by law to prepare regular “durability reports”. These reports will pass judgement on whether there has been “substantial active protest” or “substantial market disruption” by anyone against the Tasmanian forestry sector.

Substantial active protest is defined for these purposes as “an activity that has a negative material impact on forest operations legally carried out or on any processing of timber legally carried out”. Substantial market disruption is defined as “an activity that has a negative material impact on the sale of legally harvested Tasmanian timber”.

If a protest or disruption is found to be substantial, the promised 500,000 hectares of new forest reserves will not be declared and the minimum sawlog quota will be raised from 137,000 to 300,000 cubic metres. This will mean that, in return for giving Tasmania $350 million, the Commonwealth taxpayer may get nothing other than the knowledge that it has, once again, propped up the native forestry sector and subsidised various other activities across Tasmania.

Gale, like the environment groups involved, argues the agreement does not impinge upon democratic freedoms. He says while this process is:

clearly designed to put pressure on environmental groups to not engage in protests against markets and business, it does not directly silence them. If they believe the deal to be a dud, there is nothing to prevent them from taking action.

This is to ignore the effect of the arrangements. Those who protest and speak out, and do so effectively, must live with the prospect their actions will trigger retribution against the environment, to say nothing of the economy. This is a burden on the freedom of political communication and an affront to basic liberal values.

Contrary to what Gale argues, the Tasmanian Forests Agreement is not “the only bargain that could ever be struck to reconcile Tasmania’s forest conflicts”. There are a number of alternatives, the most obvious being to treat the Tasmanian forestry sector like most other industries in Australia are treated and to ensure that any deal respects fundamental liberal principles and ideals.

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30 Comments sorted by

  1. Andrew Remely

    logged in via Facebook

    Tumble weeds blow pass...I would have thought this article would have sparked up the debate.

    It's always irked me that for a very long time native forestry has relied in massive subsidy. There has also been a long history of the Federal government providing funds to re-structure a sector that can't seem to change. So what's going to be different this time? Is the current $350 million the last lot or will tax payers be giving more hand outs in the future?

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  3. Brendan Smith

    Masters of Sustainability student at Monash Universiy

    From what it sounds like everyone is tired giving money to Tasmania. I believe Tasmania needs to move towards a steady-state economy as described by Herman Daly. I agree with the notion that subsidies should not be provided to private companies however neo-liberalists and economists need to change the way they think about the economy. Whats happening in Tasmania is a clear example that the traditional paradigm of how an economy should function is fundamentally flawed. This model on industrial capitalism followed by developed countries leads to resource depletion and causes inequality. The Federal and state govt. of Tasmania both need to play a role in re-tooling the workforce down there.
    The current situation of the Australian auto industry is another example of how bad subsides are- and there flow on effects will be felt for decades.

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  4. Roger Simpson

    logged in via LinkedIn

    It is very difficult to reconcile the historical context of the Tasmanian logging industry with modes of academic liberalism. Primary industries in Tasmania have operated under subsidies for many years, whether it be direct financial support or expedited development approvals or infrastrucure support. The long term forestry industry conflict has sharply divided the Tasmanian community and resulted in a revolving door of compliant and inefficient govenments. The current agreement for all its problems is at least a form of political, cultural and economic healing for Tasmania where it might be able to focus its resources on a more fruitful economic footing. Let's hope the peppercorn rents and subsidies to bring investment into the state will begin to end.

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  5. Mark Poynter

    Forester

    This article contains several errors and misconceptions about industry employment, carbon emissions, and Forestry Tasmania losses.

    However I agree with the disenchantment with the under-representative process by which the so-called 'peace deal' was arrived at. Also, it is pretty clear that if Minister Burke hadn't intervened offering Federal money the deal wouldn't have happened. So it is in effect a political deal to make Labor-Greens look good, and particularly Burke who has increased his profile…

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  6. Dick Adams

    logged in via email @hotmail.com

    For those of you who are not familiar with commercial forestry operations, I hope the following will be of some use, however, for the vast majority of people, I doubt that it will, notwithstanding, here it goes.

    The Austrian $, as well as increased competition has certainly had an impact on the forest industry in Tasmania, and Australia. Under normal circumstances, a forest industry has options at its disposal to buffer itself from these influences.

    As previously mentioned, the forest estate…

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    1. Hrimnir Benediktsson

      logged in via email @westnet.com.au

      In reply to Dick Adams

      It seems then that the solution is to find a better product from native forest in the form of carbon storage and sequestration. What would be the transport costs of such a static product that would not need to be shipped anywhere but simply maintained and measured?

      Since native forest has a much better carbon storage and sequestration capacity than rotationally logged native forest or plantation forests, the logical solution is to switch from wood production to carbon production. It seems that…

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    2. Mark Poynter

      Forester

      In reply to Hrimnir Benediktsson

      Hrimnir

      You can keep quoting this paper all you like (as you did on Fred Gale's article), but the reality is that the long term carbon outcome is better when part of the forest is managed under a cycle of harvest and regeneration for wood products, as is currently the case. Even the IPCC agrees with this.

      The opposing view which you are pushing can only be true if you ignore the reality that carbon stored in wood products builds-up in the community, and you also ignore the substitution effect of not producing wood and replacing it with high emissions prooducts (ie. sateel, concrete, etc) or by importing wood from countries where harrested forests are not always regenerated.

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    3. Hrimnir Benediktsson

      logged in via email @westnet.com.au

      In reply to Mark Poynter

      Before I take your statements as anything more than forest industry propaganda Mark and yourself being a prime example of the general world view of people in the industry, I'd like to test your perceptions of reality.

      I notice that these same questions that I posted in the comments section of the article by Fred Gale, you haven't answered as yet.

      * Is Human-Induced Climate Change a reality for you Mark?

      * Do you think it is a Green-Left conspiracy to gain political power or perhaps simply overblown by the Green-Left as a threat to humanity?

      * Do you think that (somewhat famous) British economist Nicholas Stern is stating a Green-Left point of view when he says that Climate Change is the greatest market failure in human history and much more recently, that he was wrong in that he originally underestimated the threat significantly and it's actually much worse than he thought?

      http://www.guardian.co.uk/environment/2013/jan/27/nicholas-stern-climate-change-davos

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    4. Hrimnir Benediktsson

      logged in via email @westnet.com.au

      In reply to Mark Poynter

      The waste in Tasmania’s forests: most timber left to rot

      Andrew Macintosh and Richard Denniss

      In debates about native forestry, it’s common for the industry to claim its activities are sawlog-driven and carbon neutral. But as this infographic shows, a hard look at the data shows that most of the biomass affected by harvest operations is left to rot (or burn) on the forest floor, or ends up as woodchips and processing waste …

      Read more here - http://www.crikey.com.au/2012/12/14/the-waste-in-tasmanias-forests-most-timber-left-to-rot/?wpmp_switcher=mobile

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    5. Mark Poynter

      Forester

      In reply to Hrimnir Benediktsson

      Hrimnir

      You quoted this before on the Fred Gale piece and I advised you to look at the comments underneath which are from people who work in the forest or are familiar with harvesting/forestry. That advice still stands. With all due respect to McIntosh and Dennis, they are academics in loosely related, but non-operational fields, so why should you believe them unquestionably. Open your mind and you may learn something.

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    6. Mark Poynter

      Forester

      In reply to Hrimnir Benediktsson

      Hrimnir

      Hmmmm ...... so how should we take your comments? As I'm told that you're a prominent member of WA Forest Rescue, should we presume that you're voicing the propaganda of highly skewed extremism?

      I doubt that there's much point in answering your specific questions. Suffice to say that you must be pretty new to this if you believe forest activism is about climate change. Its been going on for a decade or two before climate change became an issue of prominence for most of the public, and…

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    7. Hrimnir Benediktsson

      logged in via email @westnet.com.au

      In reply to Mark Poynter

      I'm not a member of Forest Rescue, never have been. I am however an independent activist and in WA I do work with Forest Rescue as I see the need.

      You failed to answer my questions which is what I expected.

      I don't accept industry propaganda as an answer because where money/income and professional ego is a very high priority the truth is a very low priority.

      The carbon value of intact old-growth eastern states wet native forest is one of those truths that is plainly lied about by industry…

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    8. Hrimnir Benediktsson

      logged in via email @westnet.com.au

      In reply to Mark Poynter

      Mark, what do you make of this article that has coincidentally appeared on The Conversation website?

      As carbon dioxide hits a new high, there’s still no Planet B

      On May 9, 2013, the National Oceanic and Atmospheric Administration in the US recorded CO2 levels in the atmosphere at of 400 parts per million. This signifies a return to the atmospheric conditions similar to those of the Pliocene, which ended about 2.6 million years ago.

      (Majority of article appears here)

      When will we act…

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    9. Mark Poynter

      Forester

      In reply to Hrimnir Benediktsson

      Hrimnir

      There's probably not much point engaging further given your pre-occupation with so-called "industry propaganda".

      In reality, this is just people like me who have been university trained and worked in a profession for around 35-years responding to misconceptions of what they do being peddled by people such as yourself who undoubtedly like the bush, but have little understanding of what forestry entails, including what I perceive in you as a lack of appreciation that forests are growing…

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    10. Hrimnir Benediktsson

      logged in via email @westnet.com.au

      In reply to Mark Poynter

      Well, all remaining native forest will become old growth, if we put and and to native forest logging and allow it to continue to sequester carbon.

      I'm not making up my information but getting it from reliable science that is independent of the logging industry.

      I'm surprised that with your qualifications and amount of work with forests that you still don't really understand much about them. What's the value of a native eucalypt in terms of ecosystem services apart from carbon storage. It's value is far more then the wood alone.

      You're still studiously avoiding my questions regarding your understanding and belief on Human-Induced Climate Change.

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  7. Dick Adams

    logged in via email @hotmail.com

    Please note that i am not the Dick Adams member for Lyons, but another person of the same name.

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  8. Laurie Campbell

    Scrap metal recycler

    The loggers never had an intention to negotiate in good faith. The agreement is just lip service on the industries part, to get the money. And the enviro reps were just there to say "well we tried this way and look what happened next".

    It will only take a few months and the loggers will be back in the areas protected by this 'agreement', logging to provoke the protest reaction, so they can say in the MSM " those greenies, you can't trust them". And they still get to keep the $350 mil.

    That won't stop the log licence holders who get the compo, from sacking more workers who get no compo.

    A contract is just a means of holding protesters still, long enough for the loggers to work a way around them.

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    1. Mark Poynter

      Forester

      In reply to Laurie Campbell

      Laurie

      Lets put these negotiations into perspective - they were never fair from the start given that only the industry side had anything tangible to lose - their livelihoods.

      The environmentalists never had anything at stake except their conservation wishlists and from what I'm told the negotiations were conducted against a back-drop of threats that the environmentalists would destroy the industry's markets if they didn't get their way. That sounds a lot like extortion to me rather than negotiating 'in good faith'.

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    2. Laurie Campbell

      Scrap metal recycler

      In reply to Mark Poynter

      Mark you're as disingenuous as ever.

      What the loggers have at stake is Compo.

      What environmentalists have at stake is a viable life for their and your ( if you have any) children.

      I recognize your mercenary interests as a paid spruiker for taxpayer subsidies in a business model that the 'freemarket' would have sorted out decades ago if it weren't for the twisted principles of the likes of yourself.

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    3. Mark Poynter

      Forester

      In reply to Laurie Campbell

      Laurie

      Firstly for the record, I'm not paid by anyone to make comments on blogs like this or write occassional articles for the Institute of Foresters of Australia. I do it voluntarily when I have time.

      I don't even work directly in the native hardwood timber industry, but as an independent forestry consultant I do occasional work for a range of government and private clients, including the industry at times (mostly plantation though).

      Secondly, I don't entirely disagree with you that the…

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  9. Virginia Wong
    Virginia Wong is a Friend of The Conversation.

    Public servant

    The article sees the peace deal as against democracy but I think the issue actually represents locally-based policy making by people who actually know, care and are affected by the issue. Imagine if climate change groups could sit down and negotiate with the coal industry to come up with a mutually agreed solution that both parties could come to terms with?

    In the agreement, the vested interests were theirs alone and party politics was not in the picture. I think this was an amazing outcome that will bring certainty to both people's livelihoods-which for many may mean moving on to other industries, and the protection of Tasmania's forests.

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  10. Dick Adams

    logged in via email @hotmail.com

    Forests store carbon, its common sense and not being disputed. Subsequent to disturbance, forests will sequester carbon rapidly before reaching a mature state, with carbon storage levelling out. As mentioned previously, it is only after disturbance that carbon stocks are depleted and rapid storage on the site re-occurs. Disturbance can be in the form of fire, which releases carbon to the atmosphere, or logging, which is a mixture of carbon release and storage, particularly in structural products…

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    1. Dick Adams

      logged in via email @hotmail.com

      In reply to Dick Adams

      By the way, i love milk and wine, so don't protest against those farming industries please.

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    2. Hrimnir Benediktsson

      logged in via email @westnet.com.au

      In reply to Dick Adams

      What about you Dick? Where are you at with recognition of Human-Induced Climate Change and the urgency of it?

      Another supporter for the native forest logging status quo, Mark Poynter is studiously ignoring my questions to him about it. Will you answer these questions?

      * Is Human-Induced Climate Change a reality for you Dick?

      * Do you think it is a Green-Left conspiracy to gain political power or perhaps simply overblown by the Green-Left as a threat to humanity?

      * Do you think that (somewhat famous) British economist Nicholas Stern is stating a Green-Left point of view when he says that Climate Change is the greatest market failure in human history and much more recently, that he was wrong in that he originally underestimated the threat significantly and it's actually much worse than he thought?

      http://www.guardian.co.uk/environment/2013/jan/27/nicholas-stern-climate-change-davos

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    3. Hrimnir Benediktsson

      logged in via email @westnet.com.au

      In reply to Dick Adams

      Let's stay with forestry shall we, specifically native forest as that the main topic of the article we are commenting on.

      This study shows that there is significant carbon storage and sequestration potential for untouched (i.e. undisturbed) native forest, far more than rotationally logged native forest or plantations.

      * Re-evaluation of forest biomass carbon stocks and lessons from the world's most carbon-dense forests (i.e. SE Australian wet eucalyptus forests)

      A key paper from Australian…

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    4. Dick Adams

      logged in via email @hotmail.com

      In reply to Hrimnir Benediktsson

      1. I firmly believe that human induced climate change is something that needs to be dealt with as a matter of urgency, between it and nuclear warfare, I fear for the future.
      2. I’m not sure, and don’t particularly care if it is. As long as the primary objective is to reduce emissions and lock up more carbon without putting every man and his dog out of work and it adheres to science.
      3. Don’t have time to read it, but it sounds like it relates to question 1.

      Have a look at this project in Melbourne…

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    5. Dick Adams

      logged in via email @hotmail.com

      In reply to Hrimnir Benediktsson

      This is a link to an abstract and without reading the full report, it is impossible to provide an assessment. i trust it has been scrutinised by relevant tertiary institutions following proper scientific process.

      It says nothing of native forest logging, that is your insertion.

      It appears to differentiate between multi aged and even aged forests, the conclusions of which would be interesting (if i could access). The assertion that fast growing forests sequester more carbon is common sense, the premise of which supports sustainable forestry, as once it reaches a mature state, the rate of sequestration flat lines (another scientifically proven fact)

      i don't have time to participate in this conversation anymore, but appreciate the interesting discussion. Thanks

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    6. Hrimnir Benediktsson

      logged in via email @westnet.com.au

      In reply to Dick Adams

      What a relief, thanks for answering those questions honestly. It's rather pointless trying to debate with Climate Deniers about anything and they can't even get a grip regarding the reality and urgency of Human-Induced Climate Change. They simply aren't connected to reality.

      Plantations and farm forestry can provide all of our timber needs, see Forest Wars by Dr. Judith Adjani.

      It's not a case of putting "every man and his dog out of work" but transitioning to new industries, such as the carbon…

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