9 April 1998 ASSEMBLY

VICTORIAN PLANTATIONS CORPORATION (AMENDMENT) BILL
Second reading

Mr STOCKDALE (Treasurer) -- I move:

       That this bill be now read a second time.

The Victorian Plantations Corporation (Amendment) Bill will allow for the sale of the assets and all associated business
interests of the Victorian Plantations Corporation. The bill and the resulting sale will facilitate the government's vision for
the Victorian timber industry, namely the development of an internationally competitive and efficient timber plantation
industry.

The reform and privatisation of the corporation is a key plank in freeing up the supply side of the softwood market and is
a critical initiative in promoting the efficient operation of the industry. Over time the reform is expected to result in
significant growth opportunities in regional Victoria. It will also facilitate the government's objective of trebling
plantations by the year 2020 as the business will no longer be constrained by government ownership.

The sale process will allow bids for the whole of the Victorian Plantations Corporation or any of the three

regional parts located in Gippsland, the north east and the western regions of Victoria.

Specifically, the bill provides for amendments to the Victorian Plantations Corporation Act 1993 in the following three
key areas:

       Firstly, amendments which relate to the land currently vested in the VPC, including accurate dimensioning of all
       such land via certified plans prepared by the Surveyor-General; the closure of certain road alignments on vested
       land which are either no longer required for plantation operations or are incorrectly marked on legal plans; and
       the vesting or divesting of relatively small corridors of land, consequential upon the accurate determination of
       plantation boundaries.

       It is noteworthy that the survey of the VPC's plantations over the past two years has been the largest single
       survey project undertaken in Victoria since the surveys carried out at the turn of the century. We now have for
       the first time a definitive description of all of the corporation's plantations.

       A comprehensive assessment of all land vested in the corporation, including roads and recreational sites, has
       been undertaken in conjunction with the Department of Natural Resources and the Environment to determine
       their appropriate future treatment. Many of the roads currently vested in the corporation will be divested back to
       the Crown and declared as public roads, thereby ensuring continued public access. Similarly a small number of
       recreational sites which were vested in the VPC will revert to the Department of Natural Resources and
       Environment and will be managed by an appropriate authority.

       Secondly, the bill includes amendments which allow the VPC to grant in perpetuity a plantation licence or
       licences over its vested land and to provide for the assignment of those licences to third parties, either in whole
       or in part. A plantation licence register will be established to record the licences as well as any interests in the
       licences.

       Thirdly, the bill provides the machinery to effect the sale of the corporation, including provisions to allocate to a
       new owner or owners the assets and the undertaking of the corporation as well as allowing for the transfer of
       VPC staff. The new owner(s) will also be required to honour the obligations of existing timber supply contracts.

In relation to a granting of a plantation licence (or licences), the government will limit the plantation licence so that the
licensee can only use the land for plantations purposes, thereby facilitating the continued development of the plantation
industry in Victoria.

There will be two mechanisms by which a plantation licence may be cancelled.

The first is by voluntary surrender -- should the licensee no longer wish to operate a plantation on licensed land it may
request the issuing authority, with the approval of the Minister for Conservation and Land Management, to cancel the
licence. The minister will be empowered to require such land to be returned in an environmentally fit state before granting
the approval.

The second mechanism by which a plantation licence may be cancelled is where unauthorised use of the land occurs.
Where a licensee uses the land for purposes other than plantation operations, the Minister for Conservation and Land
Management can request the Governor in Council to cancel the licence with no compensation payable to the licensee.

While the licensee(s) will have strong commercial incentives to manage the estate in an environmentally fit manner, it will
also be bound by the code of forest practices under the planning schemes administered under the provisions of the
Planning and Environment Act 1987. This code applies equally to public and private plantation operators and it is noted
that the corporation has been subject to the code since its formation.

In addition, and to ensure that the licensee(s) is/are on the same commercial footing as private plantation owners, the bill
provides that licensee(s) will be subject to municipal rates and to the Land Tax Act (although actual plantation land will be
exempt from land tax under existing primary production exemptions).

The licensee(s) will be bound by the industry brigade amendments to the Country Fire Authority Act which were
introduced in 1997.

Under these amendments all private plantation operators are required to form industry brigades under the control of the
CFA where the fire risk is high.

These industry brigades will be formed, staffed and equipped by the owner or occupier of the land (including the new
owners of the VPC business) and will provide a first strike capability which should reduce the risk of escalation of fire.
These arrangements will ensure a coordinated and efficient response to fire threats.

Finally, the bill contains a number of necessary consequential amendments to other acts and regulations

including the Conservation, Forests and Land Act 1958 and the Forests Act 1958.

I commend the bill to the house.

Debate adjourned on motion of Ms GARBUTT (Bundoora).

Debate adjourned until Thursday, 23 April.
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