CHAIRPERSONS COMMENT – Competition Policy Review

Many members will have seen an article in the Herald Sun (15/5) under the heading Woodchip subsidy blasted – Old growth cheaper than bread. Apparently the Australian Conservation Foundation commissioned a study of the old growth timber logging industry, and found that Forestry Departments in several States including Victoria are subsidising the industry by selling native timber at below cost price and providing land rates exemptions. According to the article a report on the study shows that Forestry Victoria has the ‘worst record’ in providing unfair advantages to the industry. The old trees are being logged and exported to paper mills for woodchip production.

The concept of government agencies providing unfair advantages is not new. Over the years several members have raised the actions of some local councils that operate quarries and sell product for what is argued at below cost price, thereby competing unfairly in our market.

The Herald Sun article reports that where a government agency such as Forestry Victoria competes in a competitive market, and does not comply with the Competition Policy Principles Agreement by being both transparent and a separate legal entity, it risks losing part of the multi-million dollar competition payments made to the States by the Federal Government.

The question arising out of all this is what has happened to the competition policy review of the Extractive Industries Development Act undertaken last year? The review presumably [would have] [may have] encountered (any) anti-competitive actions in the industry. We were told that a report was submitted to the Department of Natural Resources and Environment towards the end of the year. It was then expected that the report would be circulated for public comment. What is the hold-up? Are there issues like those identified in the Herald Sun article that might be too sensitive to release publicly? We shall pursue this matter with some vigour and report back to members.                                                                                                     Ron Kerr

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