Fair pricing hits the logging industry

Fair prices? That's not fair!When the new VicForests office took over the native forest logging ‘shop’, they came in with a nice new broom. Mill owners will have to compete for logs by bidding for them when their license runs out over the next few years. Meanwhile their current license for logs has had a 17-25% price increase. This has come as a real shock to some mills and we’re hearing very loud squeals of protest. An increase in royalties is exactly what EEG has been asking for since the eighties.

As a result, well known grumpy old men and recipients of millions of dollars in subsidies and assistance, threaten to shut their eastern mill down – again. This cry of ‘wolf’ has been heard about twice a year, whenever things don’t go their way. One particular mill owner usually ends up with another bucket of public money out of it, but hopefully not this time.

Everyone knows the sawn wood side of native forest logging has been finding it increasingly difficult to sell their product (in contrast to the woodchipping side of it) – even if kiln dried. Of all timber that’s sold now, 4/5ths is pine. Builders prefer pine, most furniture is made of pine, beams are LVL glued pine, external use timber is LOSP treated pine and even look-alike melamine flooring is half the price, wears twice as well, is quicker to lay and has a backing of MDF pine.

The mills that rely on eucalypt framing timber and even floor boards are not doing well. All the mills in East Gippsland have been finding it hard to make ends meet. So it was no surprise when Bob chose this time to point the finger at the new increases in log prices rather than the reality of public preferences and buying patterns.

Other mills in financial strife

Austimbers, the large mill just east of Orbost on the Princes Hwy has also being hanging on by the skin of its teeth. Workers haven’t had a pay rise for yonks, and have even taken the rare action of striking. The mill management reckon they just can’t afford a pay rise. Ditto for Auswest and Terra Timbers.

As part of the great Humphries Theatre, Bob put a half page ad in the local paper. Selling a huge mill is not something you normally do through the Snowy River Mail. Mr and Mrs Brown will hardly decide to suddenly pack up the cows and buy three mills, six loaders, four woodchippers, an excavator, forklifts, boilers, two sawlog licences and the rest of the show. Though even if he is serious and puts the ad in the national papers he could still be just as hard pressed to find a buyer. However, even if no one wants his mill, they may want his licenses for about 80,000m3 of sawlogs. Hopefully the government will buy it back – it’s cheaper than another grant.

All credit to VicForests, who are totally unperturbed by the cries of ‘hard-done-by’. For decades now, this industry has been living on massive handouts that make the welfare budget look miserly. That’s why it’s been so easy for it to chip good sawlogs and still make massive profits. If this industry wants to be proud of its role in the regional economy, it needs to catch up with 2005 and the economic realities of user-pays. They pretend to be the mainstay of the east, while living off tax-payer handouts. The logging industry is the second most highly subsidized industry in the state – next to aluminium production.

‘Sustainable’? Pigs bum.

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