Mayor’s View – 1st May, 2008
The Cassowary Coast community needs to debate the consequences of the expansion of the managed investment scheme (MIS) timber industry.
As I have previously stated, local property holders have every right to sell their land or to change their land use. It is inadequate returns and rising input costs that may lead to the demise of the sugar industry, not the trees. The positives are that the MIS timber industry puts a floor value on land and this has enabled farmers to exit the sugar industry with funds for their retirement.
However the crucial point that must be clarified is that the timber industry is being driven by unfair taxation advantages, offered to often city based investors by the Federal Government. These tax advantages should be either withdrawn or offered to other industries. This would remove the unfair advantage that the MIS timber industry presently enjoys and change the dynamics overnight. This unlevel playing field goes to the heart of the issue.
Clearly the wider community benefit would be better served if the sugar industry did not have to face this unfair competition. Sugar milling depends on economies of scale. It will not take much to push millers over the edge and the consequences for the whole community would be enormous.
The interest in purchasing milling company shares shows that there are a few more chapters to unfold. Investors are looking to take a strategic position for when all of the northern mills possibly come together, to achieve their own economies of scale, and benefits from ethanol, co-generation of green electricity or stock-feed production are realised. But this will take time and in the meantime trees are rapidly replacing sugarcane across our landscape.
To say that when one door closes another always opens is true, but no-one can tell where all this is leading. The long term returns from the trees are untested. What about cyclone damage, attack by pests and diseases, flooding and fire that could occur over the long tree growing cycle? Cane can recover quickly, within a season and is well tested and suited to our region. If returns from cane improve, how easy will it be to replace trees with cane?
Returns from timber are a great unknown, but perhaps they don’t matter. The taxation advantages will have been gained and the plantation companies are sitting on a massive land bank that underwrites their investment regardless of the future value of the timber. But in the meantime the sugar industry is put under more and more pressure and in the main it is not locals who are benefiting from the MIS investments.
Council can intervene by charging tree companies higher rates and it can require development conditions on new tree growing areas, as had been the approach of Cardwell Shire. The policy of Johnstone Shire had been to treat all rural areas the same. The Cardwell position attempted to redress the advantages received by the tree industry and to readily monitor its growth, whilst the Johnstone approach was laissez faire and not discriminatory.
On a lighter and positive note I congratulate Cassowary Coast locals Billy Slater and Paul Flemming. Billy has been selected in the Australian Rugby League Team and Paul has been qualified for Australia’s Boxing Squad fo the Beijing Olympics.
Cr Bill Shannon
Mayor