Ms MARPLE (Altona) -- I direct to the attention of the Minister for Natural Resources the concern I raised during the
adjournment debate last night about historical elm trees in Ballarat and the possibility that they may die. Although I thank
the minister for his caution that I may be sued if I raise the matter outside the house, I assure him and other honourable
members that I will not be intimidated in my duty to inquire of him and the government about the disaster that has
befallen Ballarat and its surrounding areas.

My inquiries with the experts today revealed that many of the elm trees will not bud next season and may die. All the tests
have shown that the chemical used in conjunction with pine plantations is the cause of the yellow spots on the trees.

I call on the government to conduct a full and open inquiry into this matter as questions are being asked by the public
across Victoria, as well as in Ballarat; they want to know how and why it happened.

Will the minister inform the house of the government's role in ensuring that the Victorian Plantations Corporation follows
a code of practice when using the chemical found to be killing the historical trees? Will the minister assure the house that
the threats of legal action that were made in the house and which are presently circulating in Ballarat are not a way of
ensuring that the public does not know that the government, through corporatisation and privatisation, is distancing itself
from accountability? I ask the minister to inform the house of the commitment the government will give to assist the
Ballarat municipalities in their battle to save the trees, because they have allocated $25 000 for research into the problems
of the trees, not the government.

19.   (10-4-94)
Mr COLEMAN (Minister for Natural Resources) -- The honourable member for Altona raised the issue of leaf spotting in
Ballarat after taking issue with advice that was provided last night. That advice related to her accusations that the areas in and
around Ballarat were experiencing the largest drift of herbicides in Victoria and to her questioning why it is the biggest drift
that has ever occurred in Victoria. There is absolutely no evidence to date to prove that it is the biggest drift that has occurred
in Ballarat, and if the honourable member were to take that accusation outside the house the case would attract a fair bit of
legal attention.

The long and short of it is that work has been undertaken by the Environment Protection Authority and the Department of
Agriculture and they have declared that the water supplies are free of any contamination.

Today the honourable member went on to request that three issues be responded to. Although the material being used is not
necessarily specific to the operations of the Victorian Plantations Corporation, it is a commonly used woody weed spray,
which could be used in a lot of places, but in this case an accusation is being made about the use of the herbicide by the
Victorian Plantations Corporation.

The honourable member should have regard to two issues in making the accusation. Firstly, she said last night that she had
visited Ballarat. She would know that the canopy of trees has spots on it.
If it were a drift attributed to wind carriage one would assume that only the side of the trees facing the wind would have
spots. Each of the trees has damage to its foliage.

The Victorian Plantations Corporation does not resile from the fact that herbicide damage did occur, and when the
material is used normally a wedding agent is put with the spray that has the effect on contact with herbage of spreading
the spray. In this situation spotting occurred so the material was not applied with a wedding agent. Those two factors
indicate that some caution should be used when applying the drift analogy, because it is not clear that the damage was
caused by a drift.

The honourable member raised three issues. She asked whether the Victorian Plantations Corporation has a code of
practice in undertaking its work.

The use of herbicide material is controlled by an act of Parliament, and obviously the corporation is bound by that act. To
that extent it is clear that the corporation is not shielded in the operation of its duties. Secondly, the honourable member
referred to threats that people in the Ballarat community would be sued for making allegations not yet proven. Proof
should be available before people make accusations that may damage businesses.

The third issue was whether there would be a commitment of further assistance. The Department of Conservation and
Natural Resources today contributed $5000 for dissemination of material relating to this issue. Those funds will add to
the $26 000 contributed by municipalities in the area and will be treated as part of the request by the City of Ballaarat for
$25 000 for dissemination of information.

The Department of Conservation and Natural Resources is cooperating with the Department of Agriculture and local
members who have followed this issue assiduously with the municipalities involved. There is no indication that people
have dragged their feet. There is a commitment on the part of all involved to ascertain the source of the problem and to
address it in the long term.

The City of Ballaarat today requested that it receive assistance and advice from people with qualifications and expertise in
this area. The government will make available those people nominated as part of the program.

21  (6-10-94)
Mr THOMSON -- At the other end of the state, the Portland Regional Development Board recently accused the Victorian
Plantations Corporation, a body set up by the Kennett government to administer former Forests Commission plantations,
of exporting jobs. It said the corporation had rejected tenders from local companies to process and add value to plantation
product. Instead, the corporation had favoured a bid by a foreign-owned and foreign-based company, which will simply
export raw resources.
The Portland Regional Development Board stated:

       The taxpayers of Victoria and the industry helped establish the resource, the technology and the plant necessary
       for its processing only to see it whisked away by a totally uncommitted party in a short-sighted decision which
       will certainly impact negatively on regional Victoria.

24   (19-10-94)
VICTORIAN PLANTATIONS CORPORATION (AMENDMENT) BILL
Introduction and first reading

Mr COLEMAN (Minister for Natural Resources) -- I move:

       That I have leave to bring in a bill to amend the Victorian Plantations Corporation Act 1993 and for other
       purposes.

Mr THOMSON (Pascoe Vale) -- I ask the minister for a brief description of the contents of the bill.

Mr COLEMAN (Minister for Natural Resources) Honourable members will recall that last year during the spring
sessional period the government put in place legislation to reform the Victorian Plantations Corporation.

In doing so we relied on 180 maps that delineated the areas of the state in which plantations had been established. The bill
makes some amendments to some of the boundaries of those areas. Subsequent surveys have revealed discrepancies in
the way the 180 maps were put together. The bill corrects some of the alignments in the maps presented to the house at
that time.
Motion agreed to.
Read first time.

25.
VICTORIAN PLANTATIONS CORPORATION (AMENDMENT) BILL
Second reading

Mr COLEMAN (Minister for Natural Resources) -- I move:

       That this bill now be read a second time.

The Victorian Plantations Corporation Act 1993 established the Victorian Plantations Corporation to commercially
manage the state's softwood and most of the state's hardwood plantations. The corporation was the first body to be
established under the State Owned Enterprises Act 1993 and has provided a good example of the government's program
of streamlining the operation of government business activities.

In the period since the corporation commenced its operations in July 1993 a number of changes to the boundaries of land
vested in the corporation have been identified, with the Department of Conservation and Natural Resources and other
land managers, as being desirable in the interests of increased efficiency of management of the plantation estate. The bill
amends the Victorian Plantations Corporation Act 1993 to rationalise the boundaries of existing vested land and to vest
additional lands and assets in the corporation.

In order to rationalise the boundaries of land currently vested in the corporation, a number of vesting and divesting
actions are required. The bill provides for some parcels of land to be vested in the corporation, including land no longer
required by the Public Transport Corporation. Most of these parcels comprise less than 5 hectares, and the total area of
land affected is some 250 hectares.

The bill further provides for divesting from the corporation of parcels of land totalling approximately 300 hectares, which
will then be either included in public purposes reserves or reserved forest, reverted to unalienated Crown land or private
property or be vested in the Government Employee Housing Authority.

Some plantations with high levels of public or recreational use or which were proposed to revert to another land use after
harvesting was completed were not vested in the corporation when it was first established. These areas, totalling
approximately 5000 hectares, were instead leased by the Department of Conservation and Natural Resources to the
corporation. In order to streamline the management of these lands, the bill amends the act to vest most of these areas,
totalling approximately 4800 hectares, in the corporation.

The act currently makes provision for vested land to revert to the Crown in certain circumstances, by order of the
Governor in Council.

The bill amends the act to identify specific plantation areas which must revert to the Crown on 1 January 2015, or earlier
by agreement between the minister and the corporation.

The bill further provides that on completion of the final harvest of the plantations on those areas the land from which the
timber has been harvested must be sufficiently treated to enable the successful seeding of eucalypt species native to the
general locality. The land must also be seeded with those species to the standard agreed between the Secretary to the
Department of Conservation and Natural Resources and the corporation.

At the time of the establishment of the corporation, office and depot sites which were not adjacent to plantations were not
vested in the corporation, as the required locations for offices and depots had not been resolved.
The bill amends the act to vest a departmental office at Livingston Road, Yarram, in the corporation.

Section 29 of the act enables the corporation to enter into land management cooperative agreements under Part 8 of the
Conservation, Forests and Lands Act 1987 and transfers to the corporation certain agreements entered into by the
Secretary to the Department of Conservation and Natural Resources. The bill amends section 29 to ensure that the
corporation's powers in relation to these agreements, extends to the ability to administer, vary or amend the agreements.

The remaining provisions of the bill are those generally applicable to bills affecting the status of land and which provide
for the Registrar-General and the Registrar of Titles to make the necessary amendments to records and provide that no
compensation is payable in respect of the matters dealt with in the bill.

I make the following statement under section 85(5) of the Constitution Act 1975 of the reasons why clause 14 alters or
varies section 85 of that act. Clause 14 provides that it is intended to alter or vary the Constitution Act 1975 to the extent
necessary to prevent the Supreme Court awarding compensation in respect of anything done under or arising out of this
act.

The reason for preventing the Supreme Court from awarding compensation is as follows: to enable the Crown to change
the status of land to one more appropriate to its current use, it is necessary to ensure that the land is no longer subject to
any interests or rights arising out of the former use other than those specifically provided for by the principal act. The
existence of those interests and rights, and claims for compensation based on them, could delay or prevent a change in
the use or status of the land.

I commend the bill to the house.
Debate adjourned on motion of Mr HAMILTON (Morwell).
Debate adjourned until Tuesday, 1 November.
 

27.  (8-11-94)
Hon. R. S. de FEGELY (Ballarat) -- Will the Minister for Conservation and Environment advise the house of any
prosecutions recently made by the Environment Protection Authority in Ballarat?

Hon. M. A. BIRRELL (Minister for Conservation and Environment) -- I thank Mr de Fegely for his question and his
longstanding interest in the issue.

I am pleased to advise the house that the Environment Protection Authority has laid charges following its investigation
into the yellow spotting of trees, plants and other vegetation in the Ballarat area.

The Environment Protection Authority's charges allege that in November 1993 the Victorian Plantations Corporation and
Field Air Benalla Pty Ltd polluted the atmosphere so as 'to make the atmosphere poisonous, harmful or potentially
harmful to plants and other vegetation'.

The charges were laid under the Environment Protection Act 1970. The matter is now listed for mention at the Ballarat
Magistrates Court on 14 December 1994.

Hon. D. R. White -- Two corporations or individuals?

Hon. M. A. BIRRELL -- As I understand it, they have been laid against the corporations -- or perhaps one corporation,
joining another with it. Certainly allegations have been laid against the Victorian Plantations Corporation and Field Air
(Benalla) Pty Ltd. It would be inappropriate for me to add any comments at this stage, prior to the matter being heard.

30.   (17-11-94)
VICTORIAN PLANTATIONS CORPORATION (AMENDMENT)   BILL
Second reading
Debate resumed from 20 October; motion of Mr COLEMAN (Minister for Natural Resources).
The SPEAKER -- Order! As the required statement has been made under section 85(5)(c) of the Constitution, I am of the
opinion that the second and third readings of the bill need to be carried by an absolute majority of the house.

Motion agreed to by absolute majority.

Read second time; by leave, proceeded to third reading.
Third reading
Motion agreed to by absolute majority.
Read third time.
Passed remaining stages.

32.   (29-11-94)
VICTORIAN PLANTATIONS CORPORATION (AMENDMENT)BILL
Second reading
For Hon. M. A. BIRRELL (Minister for Conservation and Environment), Hon. R. I. Knowles (Minister for
       Housing) -- I move:

       That this bill be now read a second time.

The Victorian Plantations Corporation Act 1993 -- the act -- established the Victorian Plantations Corporation -- the
corporation -- to commercially manage the state's softwood and most of the state's hardwood plantations. The
corporation was the first body to be established under the State Owned Enterprises Act 1993 and has provided a good
example of the government's program of streamlining the operation of government business activities.

In the period since the corporation commenced its operations in July 1993, a number of changes to the boundaries of land
vested in the corporation have been identified, with the Department of Conservation and Natural Resources and other
land managers, as being desirable in the interests of the increased efficiency of the management of the plantation estate.

The bill amends the Victorian Plantations Corporation Act 1993 to rationalise the boundaries of existing vested land and
to vest additional lands and assets in the corporation. In order to rationalise the boundaries of land currently vested in the
corporation, a number of vesting and divesting actions are required. The bill provides for some parcels of land to be
vested in the corporation, including land no longer required by the Public Transport Corporation. Most of these parcels
comprise less than 5 hectares, and the total area of land affected is some 250 hectares.

The bill further provides for divesting from the corporation of parcels of land totalling approximately 300 hectares, which
will then be included in public purpose reserves or reserved forest, revert to unalienated Crown land or private property,
or be vested in the Government Employee Housing Authority.

Some plantations which had high levels of public or recreational use or which were proposed to revert to another land use
after harvesting was completed were not vested in the corporation when it was first established. These areas, totalling
approximately 5000 hectares, were instead leased by the Department of Conservation and Natural Resources to the
corporation. In order to streamline the management of these lands, the bill amends the act to vest most of these areas,
totalling approximately 4800 hectares, in the corporation.

The act currently makes provision for vested land to revert to the Crown in certain circumstances by order of the
Governor in Council.

The bill amends the act to identify specific plantation areas that must revert to the Crown on 1 January 2015 or earlier by
agreement between the minister and the corporation. The bill further provides that, on completion of the final harvest of
the plantations on those areas, the land from which the timber has been harvested must be sufficiently treated to enable
the successful seeding of eucalypt species native to the general locality. The land must also be seeded with those species
to the standard agreed between the Secretary to the Department of Conservation and Natural Resources and the
corporation.

At the time of the establishment of the corporation, office and depot sites which were not adjacent to plantations were not
vested in the corporation as the required locations for offices and depots had not been resolved. The bill amends the act to
vest a departmental office at Livingston Road, Yarram, in the corporation.

Section 29 of the act enables the corporation to enter into land management cooperative agreements under part 8 of the
Conservation, Forests and Lands Act 1987 and transfers to the corporation certain agreements entered into by the
Secretary to the Department of Conservation and Natural Resources. The bill amends section 29 to ensure that the
corporation's powers in relation to these agreements extend to the ability to administer, vary or amend the agreements.

The remaining provisions of the bill are provisions generally applicable to bills which affect the status of land and which
provide for the Registrar-General and the Registrar of Titles to make the necessary amendments to records and provide
that no compensation is payable in respect of the matters dealt with in the bill.

I make the following statement under section 85(5) of the Constitution Act 1975 of the reasons why clause 14 of the bill
alters or varies section 85 of that act. Clause 14 provides that it is intended to alter or vary the Constitution Act 1975 to
the extent necessary to prevent the Supreme Court awarding compensation in respect of anything done under or arising
out of this act.

The reason for preventing the Supreme Court from awarding compensation is as follows. To enable the Crown to change
the status of land to a status more appropriate to its current use, it is necessary to ensure that the land is no longer subject
to any interests or rights arising out of the former use, other than those specifically provided for by the principal act. The
existence of those interests and rights and the claims for compensation based on them could delay or prevent a change in
the use or status of the land.
I commend the bill to the house.

34a   (30-11-94)
VICTORIAN PLANTATIONS CORPORATION (AMENDMENT)
                                            BILL

Debate resumed from 29 November; motion of Hon. M. A. BIRRELL (Minister for Conservation and Environment).

Hon. B. T. PULLEN (Melbourne) -- The purpose of the bill is to make a number of adjustments and corrections to the
holdings of the Victorian Plantations Corporation, which was the first body to be established under the State Owned
Enterprises Act in July 1993. There is evidence that the corporation was set up in some haste and that there is now a need
for a rectification process concerning some of the land. Some 120 000 hectares of land was vested in the Victorian
Plantations Corporation and it has been found necessary to make a number of adjustments. At first it was thought the
land could remain vested in the Department of Conservation and Natural Resources but leased over a long period to the
corporation.

It has now been decided that it will be more appropriate and more direct if the land is transferred to the corporation.

The original reason for long-term leasing was based on the belief that after the timber was harvested the land had a
residual value in terms of public use. It meant that at the end of that period it should revert back to public use and should
not be replanted. So the land was intended for long-term uses other than regeneration for pine plantations. Negotiations
had to take place between the department and the Victorian Plantations Corporation before the land could be vested in the
corporation. That resulted in some 4800 of the 5000 hectares being vested in the corporation. It has been agreed that 200
hectares will remain with the department. Based on the briefings I received from the department, I believe the process is
being conducted reasonably, and I have no reason to doubt that the outcome has been effective. Some 30 changes have
been made as a result of the errors that have been picked up in the process.

That is why I said that some of the original drafting showed a degree of haste.

The second aspect of the bill -- clause 10, which amends section 29 of the principal act -- provides for situations where
there are share holdings, where plantations are grown on private land under sharing arrangements with the owners of that
land. Under those agreements, the person who acts on behalf of the government is the Secretary to the Department of
Conservation and Natural Resources. If the way an agreement is managed needs to be changed, an awkward situation
arises. The corporation has to do so through the secretary because the relationship is between the secretary and the private
land-holder. The amendment makes it possible for the corporation itself to make those adjustments, which seems
sensible.

Some areas of property had been wrongly vested in the corporation when they should have remained with the department
or the other way round - they needed to be vested in the corporation but remained with the department. Based on the
figures I have been given, some 250 hectares needs to be vested in the Victorian Plantations Corporation and some 300
hectares needs to be moved to the department. For instance, I understand the department office in Yarram has been
transferred to the corporation.

The corporation has now been in operation for more than a year. It has produced its 1994 annual report, and on the face
of things it seems to be settling down. The report says there have been some teething problems. At this stage it is difficult
to judge whether the corporation will be effective in meeting its mission statement; but that needs to be monitored. The
annual report refers to a net profit of a bit over $11 million on the sales of timber and says timber sales have increased
over previous years.
The report is a little light-on in detailing the corporation's efforts to add value to the timber. The value of the sales of
timber is presented in such a way that it is not easy to see the actual gains based on cubic metres sold. It would be more
helpful if the annual report showed a break down of the different aspects of the corporation's management of its pine
plantations so that from one year to the next you could get an appreciation of what areas of activity were returning a profit
and what areas were less profitable. It would also enable you to establish some relationship between the use of the timber
and the value obtained.

The general thrust of the timber industry strategy has been to move towards a greater emphasis on value adding and the
use and marketing of our timber for that purpose, which I think has been successful. The annual report does not make it
easy to see the progress being made by the corporation to that end. It would be helpful if that information were included
in future annual reports.

Nevertheless, I have to admit that, because it has been in operation for only a year or so, it is too early to judge how
effective the corporation has been in meeting its responsibilities.

The bill also limits the jurisdiction of the Supreme Court. It is another example of the government limiting the rights of
people to involve the Supreme Court. There is little to justify the government's systematically excluding the Supreme
Court from compensation actions. I put my objection to that clause on the record. People affected by the operations of
authorities of this type should not be excluded from seeking redress; their rights should not be restricted. Limiting their
ability to go to the Supreme Court seems unnecessary.

However, the bill is a practical amendment to the legislation setting up the Victorian Plantations Corporation.

It rationalises the boundaries of existing vested land and sorts out the land that needs to be vested in the corporation and
the land that needs to be vested in the Department of Conservation and Natural Resources. The opposition will not
oppose the bill.

The PRESIDENT -- Order! I am of the opinion that the second and third-readings of this bill require to be passed by an
absolute majority. In order that I may ascertain whether the required majority exists, I ask the Clerk to ring the bells.

Bells rung.
Members having assembled in chamber:

The PRESIDENT -- Order!
In order that I may determine whether the required absolute majority has been ascertained, I ask those members who are
in favour of the question that the bill be read a second time to stand in their places.

Required number of members having risen:
Motion agreed to by absolute majority.
Read second time.
Third reading

Hon. M. A. BIRRELL (Minister for Conservation and Environment) -- By leave, I move:

       That this bill be now read a third time.

In so doing, I thank Mr Pullen for his comments and record that the opposition did not oppose the bill; that was
appreciated. Although it has undergone a minor change, the Plantations Corporation has been a great success. It is
worthy of continued monitoring, but it has certainly gone through its early stages very well.

       The PRESIDENT -- Order! The question is that the bill be read a third time. I again ask honourable members
       who are in favour of the question to stand in their places.
Required number of members having risen:
Motion agreed to by absolute majority.
Read third time.
Passed remaining stages.
Sitting suspended 6.33 p.m. until 8.03 p.m.

35. (13-4-95)
RYAN:
The Victorian Plantations Corporation has an office at Maffra at the centre of the hardwood and softwood timber
industry.

In July a sustainable resource of about 200 000 cubic metres of timber will come from the hills to be processed in the area
in addition to the approximate 100 000 cubic metres of hardwood timber which will also be available for processing.
How will that happen? Where will that happen?

I digress for a moment: I want a timber mill to be established at Yarram; a timber mill needs to be built at Yarram. The
Yarram community can very ably provide the work force and support for that mill and can provide strong support for its
ongoing development. A lot of work must go into the establishment of a mill in the region. It should be established at
Yarram where best use can be made of available resources -- and I hope it happens!

It is important that we develop means whereby we can support industries including, for example, the hardwood industry
in East Gippsland.

I refer to a letter I recently received from Mr Hans Sumberg, Managing Director of Hans Sumberg Pty Ltd, sawmillers
and timber merchants in Cann River. His letter of 1 April 1995 states:

       Dear Mr Ryan

       Our family operates a hardwood sawmill in East Gippsland. The business was started 43 years ago and currently
       employs 19 workers who with their dependents total 50 people relying on us for their livelihood.

       We have recently finalised the construction of kiln drying and associated processing facilities costing $1.5
       million and bringing our total investment in Cann River to $4.5 million. Over the years we have acted
       responsibly, paid our taxes and our logging operations have helped to regenerate some 25 000 000 young
       eucalypt seedlings.

       The current woodchip debate has completely gone off the rails and we are greatly worried about the resource
       security and our future. Please advise us as to what we should do.

       I have enclosed an article written by Tom Brabin who has no financial interests in this matter except his lifelong
       love and experience in forestry.

That letter is indicative of the sort of industry government at a state level has a responsibility to support. It is terribly
unfortunate that we have recently seen activities in the forests of East Gippsland where those with a point of view to put
regarding the preservation of forests and the conservation movement see fit to interrupt people who are doing no more
than carrying out their proper and lawful activities -- that is, making a living. It is no good somebody there who has
purchased himself a new bulldozer going to AGC -- --

36    (26-5-95)
RYAN:   Sundown Timber Industries is a strong Victorian company which in 1993 was one of the best performers in small
business in this state. The resource in question is rated by the Victorian Plantations Corporation and will produce next
year something of the order of 3000 cubic metres of pine.

The wonderful point about that resource is that it is completely sustainable; it can be farmed just like any other product. It
needs very little care and little treatment. I dare say you can hear it growing on a quiet night! More and more of it will be
available to be processed in the passage of years. Yarram is a terrific township with a population of 2100. There are great
people down there, as indeed are all South Gippslanders. They have a committed culture to commercial development and
they do a great job of achieving it.

A further feature of the cooperation is the work done by the former Shire of Alberton which, when it received an
expression of interest on behalf of Sunwood Timber Industries, was only too happy to cooperate with the company to
enable its aim to be brought about. After the amalgamation process occurred on 2 December 1994 the newly structured
Wellington shire has taken over that role and has done a terrific job.
 37. (30-4-95)
Natural Resources: privatisation   (Question No. 175)
Hon. B. T. PULLEN asked the Minister for Conservation and Environment, for the Minister for Natural Resources:
(a) What areas in the minister's portfolio are being currently considered for outsourcing and/or privatisation?
(b) What consultants have been engaged to assist with outsourcing or investigation of privatisation, what are their briefs
and what fees and/or costs are involved?
(c) Are any of the research areas of the portfolio being considered for contracting out, outsourcing or other forms of
privatisation?

Hon. M. A. BIRRELL (Minister for Conservation and Environment) -- The answer is:

       The Department of Conservation and Natural Resources (CNR) recently announced a range of structural
       reforms. These are detailed in a document entitled CNR's Future Framework - The Next Logical Step which
       details the current status within CNR of major outsourcing and contracting out initiatives.

       As at 1 May 1995, no consultants are presently engaged by CNR to specifically examine activities for their
       potential for privatisation.

       With respect to statutory bodies within my portfolio, I have been provided with the following information:

       City West Water has advised that current operations are continually being reviewed to improve efficiency and
       effectiveness, and some internal services, eg. payroll, may be outsourced in the future. Yarra Valley Water is
       considering outsourcing field-based activities. Melbourne Water is considering outsourcing internal audit,
       environmental audit, printing services and fleet management.

       The government engaged consultants for specific shareholder investment advice in relation to the Victorian
       Plantations Corporation. The brief included outlining restructuring options and an optional structure or process
       to maximise proceeds to the state together with an implementation plan.

       No other consultants have been engaged to examine the potential for privatisation or outsourcing.

40.  (10-10-95)
RYAN: Sunwood Timber Industries has recently established a mill in the township of Yarram, a delightful centre of 2000 people
in the southern part of my electorate. This company came to Yarram for a variety of reasons. The Yarram community was
intent on winning the company and bringing it to the town to assist future development. The Victorian Plantations
Corporation, ably run by its local officer, Mr Ian Hemphill, assisted in securing the venture. The result is that over the
next 12 or 18 months approximately 300 000 cubic metres of pine from the hills near Yarram will be made available for
processing.

The forest that was first planted in the 1960s will come on stream and it is a completely sustainable resource that we will
see ever after.

Sunwood already has an impressive facility in Dandenong, and in 1993 it won the Premier's award as the fastest
growing and most successful small business in Victoria. It is a tremendously progressive company under its general
manager Mr David Westbrook. It was planning on expanding its operation and the local council was keen on the

company coming to Yarram. The predecessor of the Shire of Wellington was the Shire of Alberton which, to its credit,
went about the process of earmarking land for this form of activity. Without doubt the amalgamation of the Shire of
Alberton into the larger mass of the Shire of Wellington enabled that to be carried through.
(that was Ryan)

42. (15-5-95)
HALL:    I said that I wanted to talk briefly about economic development. To do that I need to mention the characteristics of the
economy of the Gippsland region. Briefly, our main industries are centred around agriculture, timber, energy, tourism,
education and information processing. Gippsland has a strong and viable dairy industry and beef, sheep, vegetables and
horticulture are also important parts of its primary industries. Gippsland has abundant resources of both hardwood and
softwood timbers. Hardwood timber is found in native forests, but the number of hardwood plantations is increasing.
Most of the softwood is grown in plantations, many owned by the government through the Victorian Plantations
Corporation, but a significant amount is owned by private enterprise. Timber processing is an important industry to the
region. Most members would know of APM which, strictly speaking, is called Australian Paper. Its processing operation
is based at Marysville in the Latrobe Valley, and is an important timber processing plant for the region.

44. (10-9-96) PERRIN:
The purpose of the bill is to provide for the creation of forest property rights. I congratulate the government on an excellent
initiative that we should all support. Many benefits will flow to the Victorian community: to land-holders, the forest
industry, the environment and the economy. The most significant employment benefit will be the creation of new jobs. The
legislation will attract more investment to Victoria.

The bill has been held over from the autumn session. It has been around since the last election; in fact, my speech has been
around since the last election, too. Nevertheless it is a good bill. It has been in the public domain for a long time and has
widespread support.

I should point out that my entry in the pecuniary interests register refers to an investment in SEAS Sapfor Ltd, which is a
timber plantation company.

I have held a covenant in that organisation for some 35 years, so I have had an ongoing involvement in the plantation
industry for a long time. When I first became involved it was estimated that it would be 20 to 25 years before I got a
reasonable return on my investment; but even now I am still receiving returns as a covenant holder from the clear felling of
the remnant of the pine plantations that were planted by SEAS Sapfor.

The concept of a covenant is not new. SEAS Sapfor has had pine plantations for many decades, and most of the company's
plantations are in South Australia. My plantation is at Penola in South Australia. Both the South Australian community and I
have benefited from that investment. The key to it is that I own the trees and somebody else owns the land. I pay the
land-holder to grow the trees for me. Over a period as thinnings and clear felling occur distribution dividends are paid to
covenant holders like me. Now after a 35-year investment I believe I have probably had the last distribution.

I might receive one further small distribution but I believe I have just about finished my involvement in that industry.

Mr Hamilton -- Has it been a good investment?

Mr PERRIN -- It has been a good investment and I would like such opportunities to come to Victoria. I know SEAS Sapfor
has leased some Crown land for plantations in the Portland area, which is great. I would like to see more of it in Victoria
because it will create new jobs, new sawmills and new investment. It will have a tremendous impact.

If we are to attract investments we must provide surety, and the recording of these agreements on the registration title is
important. Because my covenant involved a scheme, a trustee company was appointed to look after my interests.

As the majority of the agreements will be single plantation agreements we must ensure that both parties are protected. I am
pleased that the bill will provide for agreements to be registered on the title so that both parties are protected -- the landowner
and the tree owner.

I turn to the benefits that will be gained by the forest industry. I believe more and more Australians will move away from
using hardwoods to softwoods. That has certainly been evident to me over the past 30 years that I have had investments in
the softwood industry. I am well aware of many cases where softwoods have taken over from hardwoods.

The increased use of softwoods also protects native forests. In many areas our timber source has moved from hardwood to
softwood. Although Australia still needs hardwood it takes off the pressure.

As we create more and more softwood forest plantations we will find that fewer calls will be made on our native forests.
That is a good result for the people of Victoria because it allows those lands to be used for parks and for other recreational
purposes. It also leaves a stock of hardwoods for the future. It allows them to be expanded as they are called on less, which
is good for our children and grandchildren.

I remind the house and members of the conservation movement that timber is a renewable resource. Many people apparently
forget that trees keep growing; we are not dealing with a static situation. In both pine plantations and native forests there is
constant renewal as the old timber gives way or logging occurs and the new timber comes in to replace it. That is certainly
good for the environment. Softwoods grow much faster than hardwoods, which makes the economic return easier to obtain.
That is why most people are planting softwoods.

As the honourable members for Swan Hill and Morwell said, more and more new species will be planted and harvested in
the future.

I must point out that softwoods cannot replace all hardwoods. With many housing timber grains, flooring and fencing we
have moved from hardwoods to softwoods. But there are still many uses for hardwoods. We must never forget that we need
to call on the hardwood resource for various uses. We must not think that softwoods can solve all our problems.

I turn now to the economic benefits that will flow to Victoria from this investment. In the past there have been large
investments in South Australian forests. I believe that investment climate will come to Victoria. The new investment will
have tremendous benefits for this state. It will encourage many private plantations. Many of the softwood plantations are on
Crown land; they are government-owned and managed by the Victorian Plantations Corporation.
The government will be encouraging farmers and land-holders to move towards private plantations on some of their land
-- perhaps not all of it -- and to have a mixed use that provides adequate benefits.

As an encouragement the commonwealth government gives tax breaks to people who invest in pine plantations. There are
many income tax exemptions such as accelerated depreciation and accelerated claiming of costs. The commonwealth
government provides many benefits to those who move from hardwood to softwood plantations. The new plantations
will also provide an excellent form of revenue for landowners. Although it may take some time for the dividend to be
paid the most important aspect -- it will not be lost on many government members or on the honourable member for
Morwell -- is that it creates jobs in country Victoria. That is where the plantations will be. Although I represent a city
electorate I like to see economic development occurring in country areas.

Mr Hamilton -- So do we!

Mr PERRIN -- The honourable member for Morwell agrees with me. The bill is a clear indication that both sides of the
house will be encouraging more development in country Victoria. The value-adding aspect of the forestry industry is very
important because the decision to plant new trees gives surety to organisations such as sawmillers who will invest in new
sawmilling equipment, kilns and other equipment, again all in country Victoria. The bill will provide Victorians with
enormous economic benefits.

I now turn to the many environmental benefits in the bill. Firstly, forestry is an alternative land use, and we need to be
smart in our use of land. I understand the argument put in some communities, that not all land is suitable for plantations
and that if too much land is used for that purpose other parts of the economy will suffer.

Nevertheless, plantations should be encouraged as an alternative land use.

Secondly, plantations help reduce soil salinity, as the honourable member for Swan Hill said. Although pine trees are not
useful in saline areas, plantations are helpful to Landcare programs and they encourage a cooperative approach among
farmers, land-holders and the wider community. Some folk do not like pine plantations, particularly in the Benambra
area, where there was a kerfuffle about them, but the trees that were planted near Beechworth prior to the Second World
War have recently been harvested. I am sure that will begin a recycling process which will put softwoods in their place.

Investment in softwoods is not risk free. A fire recently went through my plantation, which meant the trees had to be
harvested earlier than they would otherwise have been.

That wood will not fetch the anticipated full dollar amount because the trees are not fully mature, but there are ways of
overcoming the spread of those risks to all covenant holders. Fire is a great hazard and it must be taken into account in
any calculations.

Another hazard that comes readily to mind is the sirex wood wasp, which infested pine plantations a few years ago. The
Commonwealth Scientific and Industrial Research Organisation was able to conquer that pest; however, people with
investments in pine plantations were concerned about it so extensive spraying was done to ensure that the wood wasp
was eliminated wherever it cropped up.

I congratulate the minister on the bill. It is great to see Victoria leading the way.

This bill will have a great impact on the forestry industry; and although it will take a while for some of the benefits to
come to fruition, as the honourable member for Morwell said, we are growing trees more quickly than we have ever
done. It will be many years before some of the benefits flow, but the bill is a great initiative and should be supported by
all. I wish the bill a speedy passage through Parliament.

Mrs TEHAN (Minister for Conservation and Land Management) -- I thank honourable members for their contributions,
and I am pleased that the opposition supports the bill. The contribution of the honourable member for Morwell was
positive and recognised the full value of the legislation. However, the contribution of the opposition spokesperson was
disappointing and, dare I say, almost embarrassing. Although she supported the bill, she was incredibly negative and did
not take the opportunity of pointing out its advantages, which are really quite remarkable.

It is the first legislation of its kind in Australia and follows similar legislation passed in New Zealand. Again, Victoria is
leading the way in breaking barriers in the commitment to and support for plantations and private forestry in Australia.

Victoria and Australia are dependent on forest products. Our current trade deficit in forest products is almost $2000
million a year, and we import over one-third of our wood requirements. Any legislation that helps Australia -- and
Victoria -- become self-sufficient in wood requirements and meet a growing demand for export opportunities should be
supported. Fortunately, the bill is supported by both sides of the house.

By the year 2010 the world's deficit in wood and wood products is projected to be more than 32 times current Australian
production.

In other words, in the year 2010 Australia will be providing only one thirty-second of the world's demand for wood. A
huge potential exists for us to become self-sufficient and meet the growth requirements of the rest of the world. Because
we can do it so well, responsibly and with proper support, that can be achieved in part through using plantations rather
than native forests. Everything possible should be done to encourage the growth of plantations and private forestry
throughout Victoria.

The Victorian Plantation Corporation has sown approximately 120 000 hectares for wood production. In Victoria 115
000 hectares is used for industrial and investment production while 15 000 hectares is used for farm forestry and
agroforestry. As the honourable member for Morwell said, a considerable part of that is in his electorate and involves
many major investors. There is a total estimated area of 250 000 hectares, but at this stage only 15 000 acres of that is
devoted to smaller farm forestry and agroforestry.

The challenge is to increase that substantially.

At a ministerial council for forestry, fisheries and aquaculture that I attended in Brisbane in August and September, a
commitment was made to treble Australia's plantation estate by the year 2020. That means increasing the total number of
hectares sown each year from between 2000 and 5000 to 20 000. So that considerable target must be met in the next 22
or 23 years.

We must also meet the challenge thrown out by New Zealand, which had 70 000 hectares of new private plantings in
1995 -- and in 1994 there were 98 000 hectares of private plantings. In New Zealand large areas of land are planted for a
number of reasons, including high rainfall, rapid tree growth, marginal agriculture and land protection needs. But those
are not inconsistent with conditions in Victoria, so we should be considering major increases in private sector planting.

The honourable member for Swan Hill referred to Chile, where each year 60 000 hectares of new plantations are planted.
As I have said, Victoria can meet those challenges. There is a total of 6.2 million hectares of cleared agricultural land in
Victoria which has rainfall above 600 millimetres a year and which would be suitable for private forestry. If Australia
needs 20 000 hectares, Victoria can provide 10 000 hectares. That is still a small percentage of the cleared agricultural
land that is available in Victoria that has an annual rainfall requirement of 600 millimetres.

By world standards our transport and processing infrastructures are good. A land capability database is being set up to
ascertain the use of the land. As the honourable member for Bulleen indicated, major plantations will receive economic
benefits. It has been estimated that Victoria's long-term income could increase by up to $3000 million per annum.

The regional industry employment factor, which the honourable member for Bulleen also referred to, could have a
multiplier effect of up to 10.

There will be environmental benefits in relation to salinity and erosion with targets for tree planting in regional salinity
plans totalling 500 000 hectares. Additional plantations will be a major step forward in controlling salinity. There will be
benefits to agriculture in dairying and sheep country through the provision of shelter for crops and livestock. This
measure provides huge opportunities for the state. As the honourable member for Swan Hill said, it will create long-term
benefits for the next generation of farmers.

Mr Hamilton interjected.

Mrs TEHAN -- As the honourable member for Morwell said, we are now in a position to move forward.

If it were not for the past mistakes and failures in agricultural investment we would be in a much better position. I shall
stray from the point slightly -- I am often asked what the government is doing about the eradication of weeds in Victoria.
I remind the house that the first bill dealing with the eradication of foreign weeds in Victoria was introduced 10 years
after this Parliament dealt with its first piece of legislation. We have been making mistakes for a long time and we have
been seeking to address them, but now we must look forward. The legislation provides a real opportunity to do that, and
I am pleased that both sides of Parliament support it. The honourable members for Morwell, Swan Hill, Bulleen -- and I
am sure other honourable members who have not spoken -- can appreciate the huge advantages and the historic impact of
the bill.

Not only is better information now available but funding for farm forestry is also now available. The commonwealth has
a farm forestry program to which it has committed $5 million over the next four years to be spent in Victoria.

49. (17-10-96) Wade
The Victorian Plantations Corporation has been given approval to make a $2.3 million investment in an export woodchip
facility.

This approval was given subject to the corporation managing the foreign currency exposure arising from this investment.
In order for the corporation to meet this requirement it is necessary to amend schedule one of the Borrowing and
Investment Powers Act 1987 so that section 11 of the act applies to the Victorian Plantations Corporation. Section 11 will
provide the power for the corporation to enter into financial arrangements (derivatives) to hedge or manage its exposure
to market movements including currency exchange rates.

51.   (29-10-96)   Victorian Plantations Corporation: freehold titles

Mr A. F. PLOWMAN (Benambra) -- I ask the Minister for Planning and Local Government to draw to the attention of
the Minister for Finance in another place the freehold title of all land vested in the Victorian Plantations Corporation. In
the north-west of Victoria that amounts to 17 000 hectares, while across the rest of the state that figure could be
multiplied by three or four. Problems arise when the surveying of freehold titles is conducted by the Surveyor-General
and the title plans do not take into consideration existing road alignments or roadside stops. There is a fair amount of
evidence to suggest that in many cases not enough space is left to allow for the realignment of existing road pavements. It
has been suggested that it would be less costly to have the Surveyor-General examine the situation at this stage, ensuring
the titles take account of existing and proposed road alignments, than to freehold the lot and go through the process later
on.

52.   (29-10-96)
Mr STOCKDALE (Treasurer) -- The honourable member for Benambra raised a matter for the Minister for Finance
concerning the conversion of the land-holdings of the Victorian Plantations Corporation to freehold. In principle, the
government believes accountability for the management of plantations will be enhanced if freehold is vested in the Victorian
Plantations Corporation. The Minister for Finance and I share responsibility for those incidents of corporatisation. The
department is working on those matters.

I understand the concerns the honourable member has expressed.
Inevitably, corporatisation involves some conflicts of interest between land-holders who have an interest in the land the
Victorian Plantations Corporation has been using. I am not sure of the precise details of the matters raised by the
honourable member, but I will ensure that they are raised with the Minister for Finance and will endeavour to get an
expeditious answer to the shires concerned.

54    (19-11-96)    ASHER:
The Victorian Plantations Corporation has been given approval to make a $2.3 million investment in an export woodchip
facility.
This approval was given subject to the corporation managing the foreign currency exposure arising from this investment.
In order for the corporation to meet this requirement, it is necessary to amend Schedule One of the Borrowing and
Investment Powers Act 1987 so that section 11 of the act applies to the Victorian Plantations Corporation. Section 11 will
provide the power for the corporation to enter into financial arrangements (derivatives) to hedge or manage its exposure
to market movements including currency exchange rates.

61.  (27-5-97)   DAVIS:
Given the emphasis on competitive neutrality, it is clear that we need appropriate protocols to reflect agreements made at
the commonwealth level and to ensure that all our state-owned enterprises are performing at a level of activity that reflects
the commercial reality. Our state-owned enterprises are progressively being exposed to the tensions of the real
commercial world. The Treasurer will progressively promulgate those SOEs that will be required to meet the required
taxation and rate-equivalent regimes.
I particularly mention that because some constituents have expressed concern about the potential for the Victorian Plantations
Corporation, for example, to be established in such a way that any rate equivalents would not be returned to the
municipality. While the VPC is a government business enterprise, it is necessary to ensure that any rate equivalents are
returned to the Crown. Should the VPC be progressively privatised, clearly any land that became freehold land would
become a rateable asset within the municipality.I reiterate, this is a small bill. Although it contains some significant amendments, they are fairly straightforward. The
opposition has failed to make its case that the consideration of the legislation should be deferred. Therefore, I support the bill
and reserve my other comments for the committee stage.

 62.  (18-9-97)
FORESTS (DUNSTAN AGREEMENT) (AMENDMENT) BILL  Second reading

Mr HONEYWOOD (Minister for Tertiary Education and Training) -- I move:
That this bill be now read a second time.

There are a number of legislated softwood agreements, all of which provide for the guaranteed supply of softwood sawlogs,
enshrined in legislation. Material changes to those agreements require the ratification of the Parliament.

The Victorian Plantations Corporation is progressively unravelling the complex entitlements to softwood sawlogs enshrined
in legislated agreements and replacing them with normal commercial log supply contracts.
This will allow the corporation to operate in a more flexible and commercial manner.

The Forests (Dunstan Agreement) Act 1987 ratified an agreement between the then Minister for Conservation, Forests
and Lands, the Treasurer, the then Forests Commission and the company, A Dunstan Timber Sales Pty Ltd. The Dunstan
agreement provided for the general supply of softwood sawlogs from the Koetong and Ovens plantations in north-east
Victoria.

The rights of the company to sawlogs under the Dunstan agreement are subject to the existing entitlements of
Bowater-Scott Ltd to softwood in the Ovens and Koetong plantations, in the Forests (Bowater-Scott Agreement) Act
1986. In the event of termination of the Bowater-Scott agreement and without subsequent amendment to the Dunstan
agreement, Bowater-Scott Ltd will lose its pre-existing entitlement to those sawlogs.

The Victorian Plantations Corporation and Bowater-Scott's successor, Carter Holt Harvey, have negotiated the
termination of the Bowater-Scott agreement which will be replaced by a new commercial agreement. In terminating the
Bowater-Scott agreement, amendments to the Dunstan agreement are therefore necessary and are the subject of the bill
now before the house.

The deed of amendment will essentially transfer an entitlement to softwood sawlogs taken from the Koetong plantation
from Bowater-Scott to the Victorian Plantations Corporation. This will protect Bowater-Scott's existing entitlement for
the pending new commercial agreement.

I commend the bill to the house.
Debate adjourned on motion of Ms GARBUTT (Bundoora).
Debate adjourned until Thursday, 2 October.

63.  (7-10-97)
FORESTS (DUNSTAN AGREEMENT) AMENDMENT BILL  Second reading
Debate resumed from 18 September; motion of Mr HONEYWOOD (Minister for Tertiary Education and Training).

Ms GARBUTT (Bundoora) -- The opposition does not oppose the bill; however, it seeks to put on public record some
concerns it has about both the bill and the underlying issues. The purpose of the bill is to ratify an agreement between the
government, the Victorian Plantations Corporation and A. Dunstan Timber Sales Pty Ltd about the supply of softwood to
the company from the corporation's plantations in north-eastern Victoria. It makes some changes to an existing agreement
in the principal act, the Forests (Dunstan Agreement) Act.

Most of the agreement will stay in place with few changes except for three substantial matters.

The first is a change in the location from which the softwood for the company is taken. The company has had an
entitlement to some 20 000 cubic metres per annum from plantations in the Ovens Valley area; that will be replaced by
entitlement to that amount plus existing entitlements from the Koetong Plantations to assist the companies that have
relocated mills.

The second change concerns an entitlement written into the agreement for Bowater-Scott Ltd which has now been
changed to a different company, Carter Holt Harvey Wood Products Australia Ltd. The Dunstan agreement mentions the
Bowater-Scott entitlement in the Forests (Bowater-Scott Agreement) Act.

The Bowater-Scott agreement will terminate because of the negotiations between the Victorian Plantations Corporation
and Bowater-Scott's successor, Carter Holt Harvey, and will be replaced by a new commercial agreement. Words
referring to the 'Bowater-Scott agreement' in the principal act need to the replaced because the act states that the Victorian
Plantations Corporation will ensure the entitlement of Bowater-Scott Ltd or its successor is protected.

The amendments are significant for the companies involved but are not necessarily policy changes. They will ensure the
agreement continues and that A. Dunstan Timber Sales Pty Ltd continues to receive its supply of softwood from
plantations run by the Victorian Plantations Corporation.

An amendment will ensure that agreements can be made between parties without the need to amend the act.

I understand that changing the agreement is a tedious process if it requires amendment of the act, but the process protects
the rights of the public and enables public scrutiny. Therefore, the opposition is concerned about the amendment. At
present the agreement can be varied if the matters involved are minor, but there is a risk that if variations to the

agreement do not require the approval of Parliament and a dispute occurs down the track one party may claim the issue
was not minor and take legal recourse, which will not be in the best interests of the companies involved or the Victorian
Plantations Corporation.

Clause 5 inserts a new provision in the principal act which enables the corporation and Dunstan timber to amend the
agreement with the approval of the minister, but without reference to Parliament.

I am concerned that the provision may not be in the best interests of the public because there will be no public scrutiny.
Moreover, there are some underlying issues that should be on the public record even though the bill does not make major
changes to the principal act. It is a pity the minister is not present to listen to the debate and respond to the issues raised
by honourable members. The Victorian Plantations Corporation wants to be an efficient government business enterprise
in line with national competition policy and having to come back to Parliament periodically with changes to agreements is
a slow process and will not enable the corporation to operate in a business-like manner. Commercial contracts may
provide more detail, be more definite, and may remain in operation for 40 or 50 years, but they may not reflect the rights
of the public that would normally be reflected in an agreement that requires the approval of Parliament. In this instance, a
move to commercial contracts means that commercial-in-confidence arrangements will apply and the public will not see
the agreements.

The agreement involves public land and the Victorian Plantations Corporation is a public corporation. However, a much
greater concern is the possible sale of the Victorian Plantations Corporation. The fact that the government is considering
the sale of the corporation has not been kept hidden, but excessive secrecy gives rise to concern. We do not know
whether the trees on the plantations will be sold or leased or whether the public land on which they are grown, totalling
almost 115 000 hectares, will be sold.

I do not receive any assistance when I ask for information and I am forced to use the freedom of information legislation
to obtain documents that are often denied to me. The opposition will appeal against a recent decision by the
Administrative Appeals Tribunal. Some documents have been released and they confirm that the government is
investigating the privatisation of the corporation.

A letter released to me recently, dated 9 September 1996, from Shell Australia to the Department of Treasury and Finance
was written by Gary Smith, the manager of corporate planning and economics. He states:

       Further to our discussion of 6 September I am writing to confirm Shell Australia's interest in the potential
       privatisation of the Victorian Plantations Corporation ...

       I understand that the Victorian government is still finalising details of the potential sale and request that Shell
       Australia be kept informed of the key developments in that process. Moreover, I ask that you note our interest in
       the Victorian Plantations Corporation for if and when the formal sale process commences.

The Victorian public is also interested in this process and would like to be informed of the key developments. There is no
indication at all -- not a word -- about the options, the consideration or the expectation and certainly no sign of any public
consultation. I ask the government, like Shell Australia, that the public be informed and that the government note our
interest in having a say.

I refer to a letter from the Australian Competition and Consumer Commission to the government referring to the
privatisation of the corporation. The letter, dated 29 November 1996, is from David Smith, the senior assistant
commissioner, mergers and assets sales branch. He states:

       Accordingly, I would appreciate the opportunity to meet with you to discuss the anticipated timing of the sale and
       what role the commission may take in the process.

More than 115 000 hectares of public land all across the state is involved, yet the public is locked out of the process. It is
not just that plantations and trees are growing on public land; community and public facilities are also involved.

I refer to an article in the Age of 12 November 1996. The Upper Murray Catchment Farm Tree Group is concerned about
the corporatisation of the VPC and the vesting of land in plantations in the Koetong area, the area referred to in the bill.
The group has a number of concerns and I was interested in their comments.

The SPEAKER -- Order! I remind the lead speaker for the opposition that the bill is fairly narrow. It deals with the
ratification of the Dunstan agreement. Although it allows her to make a passing reference to forest products, privatisation
and so on, which she has done at some length, it does not allow
full-scale debate on other matters, except where they may affect the ratification of the agreement.

Ms GARBUTT -- Thank you, Mr Speaker. I refer to page 6 of the bill where the Koetong Plantations and the agreement
are mentioned several times. The concerns in the article are directed at the Koetong Plantations and the VPC's having
vested rights to the management of those plantations. Although the bill is about the agreement, these are issues about the
VPC management of the plantations.

The SPEAKER -- Order! In that respect I think the honourable member is referring to the change of name which states:

       Ovens and Koetong Plantations' where twice appearing shall be deleted and the expression Koetong
       Plantations-- substituted therefor.

It does not allow widespread debate on the issues of forests, which might be appropriate for another debate.

Ms GARBUTT -- I refer also to paragraph 5, which mentions the sawlog available from Koetong Plantations. I refer also
to paragraph 6 at the bottom of the page, which mentions Koetong Plantations and softwood entitlements. However, I
am prepared to confine my remarks to the Koetong Plantations, and the article was about exactly that.

       The SPEAKER -- Order! Those paragraphs refer to the quantity of timber coming from the plantation.

Ms GARBUTT -- Indeed. However, in managing these plantations for the purpose of softwood production it has always
been recognised that there were other entitlements and uses apart from just taking the softwood.

Some of those have been regarded as community assets. For example, the Shelley area of the Koetong Plantations is a
popular lookout. There is a school camp, a disused rail line and a historic trestle bridge that was recognised by the Land
Conservation Council. The management of those plantations had always recognised public use of those assets on public
land. There is concern that that may not continue.

Mr A. F. Plowman -- On a point of order, Mr Speaker, in respect of your past ruling, the bill is confined to the product,
not to the management. I believe the honourable member is not adhering to your ruling, given that the management of the
area is not in question and no element of the management of that area comes within the bill; it refers to the product from
the area. As I know this area well I appreciate the reasons why the current debate is going in the direction it is. However,
I believe it is not the subject of the bill.

The SPEAKER -- Order! The second-reading speech states:

       The Victorian Plantations Corporation is progressively unravelling the complex entitlements to softwood
       sawlogs enshrined in legislated agreements and replacing them with normal commercial log supply contracts.

That gives some opportunity for the member to talk about the commercial contracts. However, I accept the part of the
point of order which says that the bill has no involvement with the management of the Koetong or other plantations.

Ms GARBUTT -- I find it very interesting that the local member is trying to close down debate about an obviously
sensitive issue.

The SPEAKER -- Order! The Chair upheld a point of order.

Therefore it is the Chair who is directing the honourable member to stay within the confines of the bill. That is the rule
for debates in Parliament. It is a narrow bill.

Ms GARBUTT -- It is obviously a sensitive issue and perhaps therefore we should not be surprised about the excessive
secrecy that has surrounded the consideration of the VPC privatisation. I invite the minister to come into the chamber
because substantial issues have been raised. She should come into the chamber and listen to the arguments and lift the
curtain of secrecy that has surrounded this whole issue -- the broader issue of the operation of the VPC. She should be
establishing a public consultative process. The public is obviously very concerned. Options should be presented to the
public and opportunities provided for the public to make submissions and talk about the issues involved.

It is public land, the public had access to it, and there are some important public facilities and assets involved. They are
very strong reasons for the minister to come in and make a statement to Parliament about the possible sale of the VPC and
where it is heading. She should invite submissions and allow the public in on the debate over this important issue, which
obviously involves some serious policy matters but also some very valuable public assets.

Apart from the commercial value of the product grown in the plantation, public interest issues are at stake. Having
introduced the bill the minister should not simply absent herself from Parliament. It is now the minister's responsibility to
come in and listen to the debate and to answer some of the concerns that have been raised.

I would be surprised if the local member who raised the point of order earlier did not also have something to say, and the
minister should be here to listen to any members who have concerns. It is part of her duty and responsibility to do so.
Perhaps the substitute minister at the table would explain where the minister is. I will not ask him to attempt to explain
any of the policy issues -- that would be irresponsible -- but the appropriate minister should be here.

As to the provisions in the bill that will assist the VPC to operate in a businesslike manner, efficiently managing public
assets, we are not objecting to them, but there are overriding issues lying behind the bill in which the public has an
interest. The minister has a responsibility to explain them to the house.

Mr DIXON (Dromana) -- It gives me great pleasure to speak on the bill because it is a positive one. There is not a lot of
secrecy in it, and it will provide jobs and a positive outlook for people in north-eastern Victoria.

Even though the area concerned is a long way from my electorate I have quite an interest in timber, being the son of a
former timber worker and having relatives still heavily involved in the timber industry.

Through an act of Parliament the Victorian Plantations Corporation (VPC) was assigned the Dunstan agreement and the
earlier Bowater-Scott agreement, which provided an increase in the supply of plantation softwoods to the tune of half a
million cubic metres per annum from north-eastern Victorian plantations. The agreement was for more than 40 years,
which is a good period because it is 5 to 10 years longer than the growth cycle from seedlings to mature plantation and
processing, so it catered for a full production cycle from the plantations.

The Bowater-Scott agreement has been terminated and its successor company is the forestry company Carter Holt
Harvey, which is world renowned in the timber business and is based in New Zealand.

The new agreement with the Victorian Plantations Corporation will allow the Dunstan company to have access to logs in
the Koetong Plantations. Carter Holt Harvey has a large milling operation at Myrtleford in north-eastern Victoria. Earlier
I had an interesting discussion about whether Myrtleford was in the electorate of Benalla or Benambra. We think it is in
the electorate of Benalla, even though the honourable member for Benambra claimed the bill related to his patch. Either
way the company runs a large operation in Myrtleford and is a major employer in the area. It is good to see this type of
industry in country towns doing what it does best and employing local people as well as value adding not only in
plantations but in the extra work done on logs and in the mill.

This is a major agreement in a rapidly globalising industry.

Recently I attended a timber industry seminar and briefing in which interested members of the industry, financiers and
people interested in the future of the industry and in good investment products were briefed about the industry throughout
the world on matters such as the trends and growth areas and where Australia and Victoria in particular fit into the global
strategy.

Victoria plays a major part and has the potential to grow and to play an even greater part in this very important industry.
The agreement goes a long way towards adding to Victoria's reputation as an international player, especially through
Carter Holt Harvey, the international firm, and its involvement in this plantation. The agreement, together with two other
joint venture agreements with the Victorian Plantations Corporation to supply material for ventures in Geelong and the
Wangaratta area, is an example of the success of the corporation in setting up new ventures and investing new capital in
Victorian expertise and goods.

The bottom line is that it brings jobs not only to the immediate area but to a wide range of other people associated with the
timber industry. There are not only people working in the plantations cutting down trees and hauling them away, but also
people with the required scientific expertise, because this is not a slash-and-burn operation; the timber industry is very
scientific, and much expertise and employment is needed in that area.

Another important part of the industry is the mill workers. Milling is a job that requires expertise. That type of value
adding is important and needs to be done well not only in terms of improving the product but also in controlling wastage
and

ensuring correct use of resources, even in the areas of transport and sales. The jobs generated from agreements such as
these cover a wide net and will increase employment in country Victoria.
The bill will bring benefits to many people, including representatives of the Victorian Plantations Corporation and the
Dunstan company, but more importantly it will provide new jobs in north-eastern Victoria, and that can only be good for
the state. I therefore commend this positive bill in a growing industry.

Debate adjourned on motion of Mr E. R. SMITH (Glen Waverley).
Debate adjourned until later this day.
 

64.         (8-10-97)  RYAN:
The Department of State Development has a wonderful initiative for projects in country Victoria valued at more than $3
million and for the city of more than $5 million. It has established a task force which assists businesses in their many
contacts with government departments. You can imagine what a great benefit it is for a potential investor to come to a
one-stop shop, which has all the personnel in the one place and which can overcome the problems that may otherwise
involve contacting individual departments. I have personally seen the benefit of this initiative. In Yarram there were
problems with the Sunwood timber mill when it went into corporate administration with assets being sold and a purchaser
required.

The mill is an integral part of the town and I was obliged to call on the services of the Department of State Development to
ensure we could get all the players to the table and achieve an outcome that suited the future purposes of the business.

I return to an issue I made at the start of my contribution. So much of the future of country Victoria lies in the hands of the
people who live there. It is tragic if people in the community, let alone those who live in country Victoria, have to rely on the
government. That is not what is wanted. We want cooperation from all the stakeholders: state government, local
government, private enterprise and the local community to achieve the best outcomes. There are myriad examples of
opportunities throughout country Victoria. The real challenge is being prepared to dare and dream to achieve those
outcomes.

I refer now to some of those issues in my electorate.

I refer first to the establishment of a deep-water port facility in Corner Inlet. It is often referred to as a port facility at Port
Welshpool, but it is not. There is an existing village, which is a lovely place and is within the Shire of South Gippsland.
Many fine people live in the town, an established centre, particularly for fishing, commercial enterprises and recreational
activities. Esso Australia Ltd maintains significant infrastructure at Barry Beach from which it services the offshore oil rigs,
and barges and supply vessels move in and out of the beach facility. So there is quite an established facility there.

It might be that we can do something that would suit Esso's purposes and which would suit the additional and broader
purposes of establishing a deep water port at Corner Inlet. Even if that were not able to come to fruition we need to and we
have the capacity to build a deep water port on the land immediately adjacent to Esso's existing facility around the point at
Barry Beach.

This has been dreamed of and spoken about for approximately 40 years. This is the classic example of what I am speaking
about when I talk about the necessity for establishing major infrastructure development in country Victoria and about giving
best opportunities to country communities to realise their aspirations in the best possible way. That is what this sort of
development offers. By general construction standards it is not expensive. It will cost about $35 to $40 million to build.
There have been impediments over the years. Those impediments are still there and they have to be accommodated. Crucially
we have the issue of the dredging, which would be necessary for ships to be able to come into Corner Inlet from Bass Strait.

I have already had some preliminary work done on that over the past few months. In general the cost of doing that dredging
is probably in the order of $20 to $30 million.

That would give us a channel of about 130 metres in width with a draught of about 13 or 14 metres, which would permit us
to get in shipping with a capacity of about 40 000 tonnes. That dredging issue has to be contended with and that will involve
surveys being done. Gippsland ports has been very cooperative in that regard and some of the folk at the Victorian Channels
Authority have also been of assistance in that initial work.

Recently the Deputy Premier had the opportunity of coming to Port Welshpool, meeting some of the local

folk and hearing them talk about the prospect to be offered for us, and dredging was one of the initial impediments. There is
also the issue of about $8 million-worth of infrastructure that would need to be built on land.
However, we do not need it to be of a similar nature to facilities in the port of Melbourne -- it does not need to come with all
the accoutrements for handling containers and the like because in the initial stages at least that would not be what we want to
do through the port.

There are questions to do with the capacity of the road infrastructure to provide services into the area. Although we are very
well served in that sphere, nevertheless it is an issue that needs to be considered. We also have the question of who is going
to use the facility -- that is, the market, who can be identified as being the potential user for this important development.
Happily some have already been identified as being appropriate, and the leader among them is the Victorian Plantations
Corporation.

A report recently released by the Minister for Agriculture and Resources details the establishment of a committee to oversee
the future development of the minister's aspirations for the growth of the pine plantation industry in Victoria. The minister
has some wonderful things in mind. His intention is to triple our production of pine by the year 2000, and hardwood,
particularly plantation hardwood, by the year 2020. Gippsland has a great part to play in that.

However, with due respect to the minister and those advising him, there was a little bit of a slip up in the advice he was
given about Gippsland's capacity to participate in the proposal. It was said that because Gippsland does not have an
appropriate export facility, or an export facility at all, that would diminish its capacity to properly participate to our fullest
extent in what this exciting future market has to offer.

That situation is a classic example of the way we can realise our aspirations by setting ourselves in a way that will serve our
communities in the best way possible and making sure that we are not in the terrible position of underachieving in respect of
what might otherwise be available to us, with the consequent cost to our communities for the years to come, particularly our
young people.

With due respect to those who prepared the report, some of it is simply not right. The content of the report was drawn up in
part to provide the answer that everybody thought was right -- that you cannot build a deep water port at Corner Inlet. In fact
such a port can be built there, and if people want to dare to dream that they are able to do it, they will be able to do it.

If the Victorian Plantations Corporation were able to have that facility operating it would be able to export directly through
Port Welshpool.

It is required at the moment, and will be required for the next five years, to put the major part of its product on trucks and
take it by road around to Geelong for export purposes. How stupid is that when about 20 minutes away the potential exists
to export those logs through a port at Barry Beach at Corner Inlet, adjoining Port Welshpool.

I am advised by the corporation hierarchy that it would save the corporation something in excess of $3 million a year and
would supply the port with about two shiploads of timber a week, which equates to around 40 per cent of the output needed
to go through the port to justify its existence. What a fantastic opportunity! Other people in the marketplace are also
interested in pursuing the same issue. As the honourable member for Narracan rightly says, it all produces more jobs in the
area.

Already we have the timber mill at Yarram that I have spoken of, which is consuming around 60 000 cubic metres of timber
annually. At the moment the Victorian Plantations Corporation is producing about 250 000 cubic metres of pine through its
Yarram office, a lot of which is going into export. Within five years that will be doubled. On a quiet night in Yarram you can
hear the pine growing. This is a chance that we cannot let go, and one of the fundamentals for the proposal and its future
will be the construction of a deep water port at Corner Inlet.

On 23 September Business Victoria hosted a seminar at Traralgon at which representatives of the federal government were
present, and not surprisingly they expressed interest in the development. I look forward to being able to stand in this place
over the passage of time and relate to the house the progress of what I see as a wonderful development that is critical to the
future of this Gippsland region.

In a wider sense, all the timber product from East Gippsland, much of which presently is intended to go north out of
Victoria up over the hills to Eden, should be going out through Port Welshpool.

There are plenty of enterprises in the Latrobe Valley that would be able to access the port at Port Welshpool. We have the
prospect of exporting briquettes, for example, out of the port if we are able

to get a deep water port facility constructed at Corner Inlet. That is the first area I refer to as indicating that as
parliamentarians we have a responsibility, particularly those of us who represent country Victoria, to take a lead in
developing the notion of infrastructure of this scope, participating in the community and liaising with government at all
levels to bring it to fruition. The Shire of South Gippsland has been doing a great job in this regard, particularly Cr Janette
Harding.
To her great credit and that of the council Councillor Harding is in there going her hardest to bring this about. Tomorrow
representatives of the shire are coming to Parliament House for another meeting with me on this matter and other issues
of relevance. While I am on the topic of Port Welshpool, I mention that the Tasmanian government has announced that it
will run a fast ferry service to the mainland. The only thing it got wrong was deciding to send the ferry to the wrong
place -- Melbourne. People in Port Welshpool have been anxious to re-establish the ferry service that operated until late
1983 and had its own distinct market along the eastern seaboard, although it received some business from Melbourne.

We have been trying to secure the return of the ferry service to Port Welshpool from Georgetown, Tasmania. I met with
the mayor of Georgetown along with the chief executive officer and representatives of the Gippsland shire to see if we
could get the ferry service back.

The Tasmanian government has given a commitment to run the ferry, but it will go to Melbourne, not Port Welshpool. I
emphasise that that may be only temporary because if the government is prepared to consider the proposal -- and I think it
should -- it would cost only about $400 000 for dredging work on the approaches to the jetty at Port Welshpool, and next
season the ferry service could be back again.

67.  (15-10-97)
FORESTS (DUNSTAN AGREEMENT) (AMENDMENT) BILL  Second reading

Hon. G. R. CRAIGE (Minister for Roads and Ports) -- I move:
That this bill be now read a second time.

There are a number of legislated softwood agreements, all of which provide for the guaranteed supply of softwood sawlogs,
enshrined in legislation. Material changes to these agreements require the ratification of the Parliament.

The Victorian Plantations Corporation is progressively unravelling the complex entitlements to softwood sawlogs enshrined
in these legislated agreements and replacing them with normal commercial log supply contracts.

This will allow the corporation to operate in a more flexible and commercial manner.

The Forests (Dunstan Agreement) Act 1987 ratified an agreement between the then Minister for Conservation, Forests and
Lands, the Treasurer, the Forests Commission and the company, A. Dunstan Timber Sales Pty Ltd. The Dunstan agreement
provided for the general supply of softwood sawlogs from the Koetong and Ovens plantations in north-eastern Victoria.

The rights of the company to sawlogs under the Dunstan agreement are subject to the existing entitlement of Bowater-Scott
Ltd of softwood in the Ovens and Koetong plantations, in the Forests (Bowater!Scott Agreement) Act 1986. In the event of termination of the Bowater-Scott agreement, without subsequent amendment to the Dunstan agreement, Bowater-Scott
Ltd will lose its pre-existing entitlement to those sawlogs.

The Victorian Plantations Corporation and Bowater-Scott's successor, Carter Holt Harvey, have negotiated the
termination of the Bowater-Scott agreement, which will be replaced by a new commercial agreement. In terminating the
Bowater-Scott agreement amendments to the Dunstan agreement are therefore necessary and are the subject of the bill
now before the house.

The deed of amendment will essentially transfer an entitlement to softwood sawlog taken from the Koetong plantation
from Bowater-Scott to the Victorian Plantations Corporation. This will protect Bowater-Scott's existing entitlement for
the pending new commercial agreement.

I commend the bill to the house.

Debate adjourned for Hon. PAT POWER (Jika Jika) on motion of Hon. C. J. Hogg.

Debate adjourned until next day.

68.     (28-10-97)
FORESTS (DUNSTAN AGREEMENT) (AMENDMENT) BILL

Debate resumed from 15 October; motion of Hon. G. R. CRAIGE (Minister for Roads and Ports).

Hon. PAT POWER (Jika Jika) -- The Forests (Dunstan Agreement) (Amendment) Bill is simple but important legislation.
The opposition does not oppose the bill; it understands that it is an important step forward for the softwood industry in
employment, especially in the north-east of the state. However, the opposition has some concerns about the process.

Honourable members will be aware that the bill ratifies an agreement between the state government, the Victorian Plantations
Corporation (VPC) and A. Dunstan Timber Sales Ltd. The bill also amends the current agreement, the Forests (Dunstan
Agreement) Act.

There are three substantial issues in the amending bill. The first change alters the location from which the softwood is to be
taken. Currently some 20 000 cubic metres per annum is taken from plantations in the Ovens Valley. That location will be
replaced by that entitlement plus existing entitlements from the Koetong plantation to assist the companies that have relocated
mills. The second change is a procedural or consequential one. It acknowledges that Bowater!Scott Ltd is now known as
Carter Holt Harvey Wood Products Australia Ltd. An amendment will ensure that agreements can be made between parties
without the need for Parliament to amend the act. However, the opposition expresses concern about the capacity for this to
occur outside the processes of Parliament. At present the agreement can be varied if the matters involved are minor, but there
is a risk that if variations to the agreement do not require the approval of Parliament one party may take legal recourse. It is
reasonable for the opposition to argue that where substantial changes to an agreement are to be made as much as possible
they ought to be made through Parliament.

Clause 5 enables the Victorian Plantations Corporation and A. Dunstan Timber Sales to amend the agreement with the
approval of the minister but without coming to Parliament. Such a provision is potentially not in the best interests of the
public because there is no public scrutiny. Commercial contracts may not reflect the issues the public hold dear or the public
issues to which Parliament and its processes guarantee access and exposure.

Commercial-in-confidence arrangements will apply under the conditions of clause 5, and the public will not be able to see
those agreements. A much greater concern is the possible sale of the Victorian Plantations Corporation. We do not know
whether this involves the sale or lease of the trees or whether it will involve the sale of the public land on which those trees
are grown -- some 115 000 hectares. It is important to understand that 115 000 hectares of public land is a significant public
asset, and if there is to be divestment of that property there ought to be
a process from which the public is not locked out. There ought to be a process that ensures that there is a forum -- the
Parliament -- where public views are put forward and aired in the traditional manner.

Historically the management of the plantations has always recognised that there were issues apart from simply harvesting
softwood. In the area the subject of this legislation there is a school camp and a disused rail line that contains a historic
trestle bridge recognised by the Land Conservation Council. It is important to acknowledge that a public process is
essential, especially when we are not just contemplating softwood plantations and the necessary provision and guarantee
of a resource but are also addressing other public issues encapsulated in the 115 000 hectares. This is public land; the
public currently has access to it and important public facilities and assets are involved.

In conclusion, the opposition does not oppose the bill.

It recognises that VPC is an important employer of local people in many parts of Victoria, especially in the north-east
where the plantations are. It is, of course, absolutely necessary that there is a guaranteed flow of resource. In that sense
the opposition is happy to take this stance, although it expresses concern about there being an understanding that the bill
relates not only to plantations and the softwood resource but to public land to which there is currently public access and
of which uses other than plantation use are made.

Hon. PHILIP DAVIS (Gippsland) -- In response to Mr Power's contribution, I pick up the essence of his general
comments which relate to a need for continuing parliamentary scrutiny of the commercial arrangements the Victorian
Plantations Corporation will enter into in the future. Clearly, as articulated in the minister's second-reading speech, the
bill provides a mechanism to progressively assist in the unbundling of the fairly complex entitlements to plantation
product that have been legislated in the past.

It is important to recognise that the minister observed that this would allow the corporation to operate in a more flexible
and commercial manner.

I note Mr Power's suggestion that it is necessary for us to continue to operate in a traditional manner. The whole purpose
of the government's public sector and statutory authority reforms -- particularly its reorganisation of the VPC -- has been
to ensure that the corporations operate progressively and increasingly as proper, commercially focused businesses.

It is not sensible for the VPC and its customers to be dependent on continual legislative review when the contracts entered
into will affect no-one other than the parties to the contracts. I reiterate that plantation forests are an important element of
Victoria's rural and regional economies. The timber and pulp products industry has a turnover of about $3000 million a
year.

It provides significant employment opportunities in rural Victoria, particularly in plantation harvesting and management,
where an estimated 520 people are employed directly -- and a further 6280 are estimated to be employed in the production
of wood and paper products.

The bill simply seeks to ratify the amendments to the softwood plantation supply arrangements in north-eastern Victoria
that involve the Koetong and Ovens plantations, which are now under the management of the VPC. All the parties to the
agreement supported the amendments, including the Treasurer, the Minister for Conservation and Land Management, the
VPC, Dunstan Timber Sales, which is a subsidiary of Boral, and Carter Holt Harvey Wood Products Australia.

Ratification is necessary because of the provisions in the two principal acts, the Forests (Dunstan Agreement) Act and the
Forests (Bowater!Scott Agreement) Act.

The amendments are required to facilitate the changes to the supply arrangements that have been outlined and will provide
the flexibility to enable future arrangements to be entered into. Dunstan's existing right to sawlogs extends to available
logs from the Koetong and Ovens plantations. The deed of amendment limits Dunstan's area of supply to Koetong.

As I have said, the bill further amends the principal act to allow amendments to be made between VPC and Dunstan's
with the approval of the minister, where those issues are not binding on other parties. The bill also removes references to
existing entitlements to softwood by Bowater!Scott Ltd, which is now known as Carter Holt Harvey Wood Products
Australia, and creates reserved entitlements for VPC.

In conclusion, I am pleased the opposition supports the bill in principle.

I have noted the concerns expressed by Mr Power on behalf of the opposition about the appropriateness of public
scrutiny and further amendments to the supply agreements. However, I point out that it would not be possible for an
organisation that was simply administering relationships with its customers to have a commercial focus if Parliament
were inevitably interceding. Those arrangements would be put at risk because the VPCwould not be operating on a
commercial basis.
I support the bill, which assists in refocusing wood supply arrangements in commercial ways. I urge the house to
support it.

Motion agreed to.
END 68
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