23 June, 2013

Anger over loggers' grab of exit cash


Andrew Darby  

Hobart correspondent for Fairfax Media

The Age, June 23, 2013

It was the loophole you could drive a truck through. A $44 million federal government bailout of struggling logging contractors has ended in angry dispute.

The taxpayer cash was meant to ensure that operators who cut and cart timber could pay their debts and leave the collapsed Tasmanian native forest logging industry.

Instead, some ''phoenixed'' their businesses, a Senate committee has heard. After companies closed and payouts were made, new businesses rose from the ashes under the control of other family members. Now competition between the survivors is even more cutthroat.

Greens leader Christine Milne said: ''I think the system was rorted, but it was allowed to be rorted. All that's happened in a number of cases is that log trucks have just had a different sign painted on the door.''

A list compiled by industry insiders and seen by Fairfax Media raises questions about 20 of the 61 contractors to receive payouts, at least nine of whom are said to have other family members doing business in native forests.

Separate compliance and fraud teams have been established to manage and investigate the Intergovernmental Agreement Contractors Voluntary Exit Grants Program, (IGACEP), according to a spokesman for Forestry Minister Joe Ludwig.

In the spotlight is a Department of Agriculture, Fisheries and Forestry deed poll requiring an undertaking that for 10 years, grant winners will not use their equipment or work in the native forest sector - except as an employee.

Industry leader Ken Padgett won $825,000 under the IGACEP and said he was out of native forest. But Mr Padgett, who still employs 45 people in Tasmania's north-east, said he would not have taken the money if his sons had been precluded from working in native forests, should they choose to.

He agreed with Senator Milne in a Senate committee hearing that this was ''succession planning writ large''.

''An older person can just take the money, refinance the business, and hand it over to the sons,'' Senator Milne said.

''This is not what exit means.''

North-west Tasmanian contractor David Scott received $1.8 million. His 19-year-old apprentice diesel fitter son now operates a native forest haulage business. Mr Scott, who did not return calls, told the ABC: ''I work for the business. I'm just a worker.''

In the state's central highlands at Ouse, contractor Wally Triffett told Fairfax Media the $811,800 he received was used to settle his native forest logging business. He said he gave his son his last Kenworth log truck and now did civil earthworks himself.

''It's terrible what people have done,'' Mr Triffett said.

One of the state's biggest log haulers, Aprin Pty Ltd, won $2.5 million to leave native forests. Aprin principal Ron O'Connor operates from the same yard near Hobart as Timber Marshalling Services (TMS), run by his son Brendon O'Connor. TMS was contracted this year to cart logs for the state public forest agency, Forestry Tasmania. Neither man responded to calls.

The failure of successive federal government attempts to boost the industry shows in a comparison of grants to contractors who first won big handouts to retool for plantation work, then later were given money to leave the industry.

DAFF documents show that Aprin was a $1.05 million beneficiary of a retooling program to move out of native forests four years ago. An Ernst & Young study of a $54 million Howard government program said DAFF files were so deficient that in 60 cases there were no audited statements supporting grant applications.

These cases therefore lacked a basic proof that the grantees needed a grant.

North-west Tasmania contractor Jason Weller, who did not apply to exit, said others with government cash were undercutting him with unsustainable rates. ''While they have given these guys a Band-Aid fix, they are destroying our business, which is a tax-paying business,'' he said. ''It was meant to be an exit package, not a refinance, reboot, get-going-again package.''

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