1.1 Highlights of social and economic situation
1.2 Highlights of long-term objectives and goals
1.3 Role of country in a regional context
1.4 Summary of major issues
The Australian economy grew by 4.3% in 1995-96, due mainly to increased private consumption expenditure, business investment spending and net exports (Woffenden et al. 1997). Australia's economic growth is expected to slow to 3.2% in 1996-97, before strengthening to 3.7% in 1997-98. The Australian economy is assumed to grow by an annual rate of 3.5% to 2000. Australia's inflation rate is expected to remain low at around 3% in the medium term. Interest rates are expected to remain relatively unchanged with prime lending rates expected to average 9.3% in 1997-98.
The two key influences on the Australian economy in the medium term will continue to be the business cycle and structural change, that is, changes in the composition of activity, whether in response to changes in policies (such as reductions in tariffs and interest rates), or in consumer preferences (for example, more spending on recreation, travel and eating out at the expense of clothing). Accelerating structural change in the 1990s is a major reason for the erratic nature of the recovery from recession in 1990-91 (Shields 1997). Structural change in the sawntimber sector is being driven by a dramatic change to the supply of softwood plantation sourced timber and changes to the building market where alterations and additions to dwellings are projected to increase in importance over new dwellings. Softwood production (which exceeded hardwood production for the first time in 1990-1) is projected to become increasingly important in meeting-building sector needs. (Neufeld).
Exports in the forestry and fisheries sector to 2001 are predicted to decline slightly. No projections have been made for the forestry sector alone.
Australia currently has a population of approximately 17.5 million. In 1995 the forestry and associated industries (including wholesaling and retailing of forest products) had an annual turnover of approximately A$10 billion. The contribution of forest harvesting activities to Australia's 1996 GDP of A$429.6 billion was approximately A$0.5 billion.
Australia's aim is to achieve ecologically sustainable management and use of Australia's public and private forests, whilst increasing wood production and achieving greater industry and regional development. Australia has a target to treble its plantation estate by 2020. Australia is in the process of setting aside forest areas in secure comprehensive, adequate and representative reserves in order to achieve environmental outcomes whilst giving greater certainty to industry in terms of areas which will be available for timber harvesting in future. Forest industries are important for economic and environmental reasons in a number of areas in Australia. Integration of forestry activities in farming operations are seen as a good way of achieving land rehabilitation and enhancing forest industries and regional development.
Australia is a Federation which necessitates a division of power between the Commonwealth government, State and Territory governments ("State governments") and Local government (which exists under State government legislation). Under Australia's Constitution State governments have control over most land in Australia-they maintain registers of ownership (and in some cases registration of leasehold and other interests in land), own significant tracts of land (a proportion of which they have used for forestry activities) and together with Local government regulate land use.
Despite this formal structure all levels of government have a role to play in land management. In 1992 the Commonwealth and State governments developed a common policy position on forests known as the National Forest Policy Statement (NFPS). An Intergovernmental Agreement on the Environment concluded in 1992, established a cooperative national approach to environmental issues and better defined the roles of the different levels of government. It establishes principles through which environmental considerations are taken into account in government decision making and includes agreement on specific areas of environmental concern including nature conservation.
The NFPS sets out objectives concerning conservation, wood production and industry development, use of private native forests, development of plantations, water supply and catchment management, tourism development, employment, work force education, public awareness and involvement, research and development and the further development of intergovernmental arrangements and decision making processes.
The Commonwealth launched a four year Wood and Paper Industry Strategy (WAPIS) in December 1995 which aims to develop the wood and paper industries whilst protecting forests for our future generations. Its focus is on industrial development, value adding and new investment. It contains a package of measures to help forest industries become more internationally competitive and innovative.
Specific goals within the NFPS and WAPIS include:
· establishing a comprehensive, adequate and representative forest reserve system;· to increase the use of farm forestry for commercial purposes;
· increasing value adding opportunities creating greater regional employment and development opportunities; and
· increasing the competitiveness and efficiency of Australian forest and timber based industries including increased recycling.
To achieve the goal of increasing the area under plantation threefold from one million hectares to three million hectares by the year 2020 farm forestry will need to provide a significant proportion of additional plantings.
Australia's progress to 1997 in achieving the above goals include the signing of the first of twelve Regional Forest Agreements (RFAs) which will among other things refine production and non production areas of forests. Considerable work has been done towards two other RFAs. The process of removing impediments to the development of forestry and forestry industries due to tax and planning laws is well underway and should make growing trees a more attractive investment option.
1.3.1 Trade
1.3.2 Sustainable management techniques for forestry and research and development
1.3.3 Sustainable management of Australia's forests
1.3.4 Australia's involvement in the Asia-Pacific region
From an international perspective, Australia, with 1.2% of the world's forest, is a relatively small player in the world market for most forest products, except hardwood woodchips. In 1995-96 Australia exported $A1.02 billion worth of forest products, of which woodchips made up $A544 million (53%), and exports of paper and paperboard were $A245 million (24%).
Australia's imports of forest products in 1995-96 totalled $A2.9 billion, of which the two largest components were paper and paperboard ($A1.7 billion), and sawnwood ($A367 million). New Zealand, Finland and the United States are important sources of paper and paperboard for Australia, while the bulk of Australia's sawnwood is sourced from Canada, New Zealand and the United States (ABARE 1996).
Australia, as part of the Asia Pacific region, also participates in tropical timber trade, although tropical timber imports have fallen in recent years as the local softwood resource has expanded (see Johnson 1997 and Neufeld 1997).
Exports of sawnwood by destination 1995/96
Australia has considerable expertise in sustainable forest management techniques both in research organisations and in State government forest agencies. In addition there are a number of Australian private consultancy firms working in the forestry area which also undertake work in the Asia Pacific region. There are a number of private companies conducting research particularly in provenance testing and plantation management and harvesting techniques.
In pursuance of the NFPS Australia is engaging in a forest assessment process which will lead to Regional Forest Agreements (RFAs). RFAs will be based on scientific assessments of environmental and heritage values of forests, assessments of their economic value and the vulnerability of forest dependent communities to changes in the uses of forests. Public consultation with the communities living in areas to be covered by an RFA is an important component in the process of developing an RFA. RFAs will provide a blueprint for the future management of our forests, and the basis for an internationally competitive and ecologically sustainable forest products industry. RFAs last for 20 years and provide for a performance review every five years. Forest management under the RFAs will continue to be scientifically based and harvesting will be supervised by University qualified foresters. The States and Territories have in place comprehensive legislation and policies governing forest management.
Australia supported the development of the Code of Conduct for Logging of Indigenous Forests in Selected South Pacific Countries which was endorsed by all regional Heads of Government at the South Pacific Forum in Madang in 1995. Australia is assisting Indonesia, the Task Manager, in the preparation of the Asia Pacific Code of Practice for Forest Harvesting by funding an Australian consultant to draft a Code of Practice for consideration by governments. Australia's aid programme contributed $A15.6 million to the forests sector in 1995-96 through both projects under country and regional programmes, and contributions to multilateral agencies. Aid to the forests sector has doubled in nominal terms over the last five years, reflecting increased attention to sustainable forest management in the Asia-Pacific region.
Australia supports a range of forestry research activities through the Australian Centre for International Agricultural Research (ACIAR). ACIAR commissions bilateral collaborative research projects addressing problems in developing countries, promotes interaction between Australian and developing country scientists and formal and informal training of scientists. The objective of commissioned research is to provide solutions to agricultural, forestry, fisheries and natural resource management problems common to Australia and the partner countries. ACIAR undertakes provenance testing of Australian tree and shrub species for use in reforestation and agroforestry and helps fund the Australian Tree Seed Centre which provides seed, information and training to developing countries. ACIAR also provides Australian support to International Agricultural Research Centres.
Australia's diverse flora and fauna and landscapes are an important part of Australia's attractiveness for overseas tourists though it is difficult to attribute a dollar value to the contribution Australia's forests make to this attraction.
In recognition of the importance of forests to tourism in Australia the NFPS committed $1.9 million over four years to the Forest Ecotourism Programme (FEP). FEP's aims were to make tourist experiences in forested areas more user friendly and educational whilst minimising impacts on the environment. FEP also funded development of planning and management strategies for future growth of forest ecotourism for some regions. Some State governments expend considerable amounts on forest based tourism and recreation and State government agencies have expertise in forest based ecotourism management.
It is difficult to attribute a proportion of tourist dollars spent to the existence of forests in particular areas but it is clear Australia's flora, fauna and landscapes are a major attraction for international tourists visiting Australia. 50% of inbound tourists report visits to National/State Parks/reserves/caves. Many of these parks/reserves are set aside, in part at least, to protect the forests which they contain. Overseas tourists represent approximately 7% of visits to National Parks. RFAs should also provide resource security to tourist operators who rely on forests to provide a viable industry.
Australia will continue to work towards greater efficiency and sustainability of its agricultural and forestry sector and to develop a more productive relationship between the two sectors. Expansion of the plantation estate and greater incorporation of tree growing as a part of farming operations (for profit and environmental/sustainability benefits) are a priority and should lead to a greater total resource and greater certainty of resource availability in the future.
For over 10 years Australian governments have been encouraging the planting of trees for environmental and development purposes through programmes involving local communities.
State governments have had farm forestry programmes for a number of years which, like the Commonwealth Farm Forestry Programme, aim to encourage the incorporation of commercial tree growing and management into farming systems for the purpose of wood and non-wood production, increasing agricultural productivity and sustainable natural resource management. Farm forestry has the potential to provide substantial environmental benefits, including greenhouse and biodiversity, as well as landcare, regional development and employment benefits.
A major plank in improving the overall productivity and sustainability of use of Australia's forest resource is the development of RFAs. RFAs aim to provide certainty to industry on areas available for harvesting, ensure sustainable management systems for forests and the protection of biodiversity, heritage, wilderness and other values. The first of twelve RFAs has been concluded, the remaining significant forest areas of Australia will have RFAs by the turn of the century. These agreements will improve the climate for long term investment in timber industries. The Commonwealth is funding (with matching State Government funding in the case of one State, New South Wales) a Forest Industry Structural Adjustment Package to assist adversely affected native forest industry businesses and workers adjust to changes in the sector and facilitate structural change arising from the development of Regional Forest Agreements. Measures under this Package include assistance for unviable native forest businesses to exit the industry and for viable businesses to remain and invest in further downstream processing. Assistance for displaced workers to retrain or be redeployed is also available under the Package.
Privatisation or corporatisation of State government owned forests will continue and is likely to have been completed by 2010. This may increase competition in log supply, improve efficiency of wood production and reduce the potential for conflicts of interest arising between government's role as forest owners and regulators. The changes taking place in State government forestry operations may increase opportunities for investment in forestry industries including in the forest services sector.
