1. LOUISE ASHER (Minister for Small Business) ON VPC WOODCHIP PLANS:
19 November 1996 COUNCIL MISCELLANEOUS ACTS (FURTHER OMNIBUS AMENDMENTS) BILL  Second reading

Hon. LOUISE ASHER (Minister for Small Business) -- I move: Borrowing and Investment Powers Act 1987
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.

(Wade made same speech on 17 - -10 - 96)

2.
GARBUTT 7-10-97 REGARDING POSSIBLE BUYERS OF THE VPC
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.
 
 

 
3.PETER RYAN  on east Gippsland woodchips 8-10-97
....Pursuant to that agreement there was a call in 1996 for expressions of interest for the purchase and processing of
approximately 800 000 cubic metres per annum of residual logs from East Gippsland and Tambo forest management
areas. In October 1996 the department entered into heads of agreement with Harris-Daishowa, the T. J. Andrews sawmill
company, Misal Technologies and Midway Wood Products. Negotiations for supply contracts with those four companies
are almost complete, and an announcement in that regard is imminent.

All of that would not have happened without the removal of export controls, which has been achieved. As to sales,
initially there will be woodchip exports and each company will propose further developments to offer significant benefits
to East Gippsland through potential investments of up to $200 million and direct employment of up to 500 people. Plants
will be established for the production of engineered wood products and there will be plantations and integrated sawn
timber processing facilities.

Utilisation of the residual resource, which was previously wasted, will significantly improve the viability of logging
operations, particularly in areas where previous selective logging has reduced forest quality. That will allow the
department to economically return large areas of state forest to maximum growth potential and, in the long term, increase
the resource base available to the industry.

To further improve the performance of the forest and forest product industries in East Gippsland the department will
undertake contract logging in the East Gippsland forest management area, so it is win-win all around. If only those dills
in East Gippsland who persist in obstructing things could have regard for the damage they are doing, everybody
concerned, including them, would be better off.

Various initiatives are being pursued in the Central Highlands, where the government wants to achieve similar outcomes.
The government has finalised a new wood supply agreement with Amcor Ltd lasting until the year 2030 that will provide
the basis for increased investment in Amcor's pulp and paper mill at Maryvale. The department currently supplies about
500 tonnes of wood per annum to Amcor, and it is critical to the production of high quality paper products. Amcor's
initiative will produce about 300 jobs in the future.

4.
PETER RYAN (SAME SPEECH)  8-10-97 REGARDING PORT AND WOODCHIP MILL AT PORT WELSHPOOL
   ........ 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 ableto 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.
Tomorrowrepresentatives 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.
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