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Majestic Timbers Crumbles Without Freight Subsidy

27 Sep 2018

Cassy O’Connor MP | Greens’ Leader and Forests spokesperson

The Greens have received information to suggest the company that was Majestic Timbers is no longer operational. When we questioned the Resources Minister about allegations that contractors who haven’t been paid for three months and workers have been told not to turn up from tomorrow, he didn’t deny the claims, and confirmed Majestic Timbers’ containerised log exports were no longer operational. 

Majestic Timbers was a company that didn’t exist until the 18th July 2016, after the government announced an expressions of interest process to export 180,000 tonnes of timber out of Hobart each year. 

Majestic Timbers was only registered after the contract negotiations with the government, and on the basis of being able to access millions of dollars in annual subsidies from the Commonwealth Freight Equalisation Scheme. Minister Barnett failed to ensure proper due diligence was undertaken when awarding this contract.

Majestic Timbers was wholly reliant on accessing the Commonwealth Freight Equalisation Scheme. Without that subsidy, they had no business case to export timber out of Hobart and once the arrangement with Swire Shipping fell down and the access to the subsidy was removed, the company’s foundations have fallen out from beneath them leaving contractors and workers in the lurch.

It’s extremely disappointing to ask this question in Parliament, and have Minister Barnett pretend everything with Majestic Timbers is peachy.  It’s disrespectful to the contractors and workers - it’s not their fault but the fault of the government that didn’t do due diligence.

The failure of Majestic Timbers confirms what we have long known.  The native forest woodchip industry is dying and cannot survive without public subsidy either in the wood price or via transport subsidies.

There was a subsidy embedded in the sale of the wood, and one from the Freight Equalisation Scheme, and even with those subsidies, this company – which didn’t exist two and a half years ago – couldn’t make it work. It essentially costs more to grow the trees that Forestry Tasmania is selling them for.  Of course, it is the taxpayers who lose out.

Native forest woodchipping and bulk native timber exports are features of an unviable industry that Minister Barnett has spent his entire time in the job pretending is being revived. It’s completely untrue, and the evidence speaks for itself.