Plantation Types | Current plantation resource | Key plantation issues

Key plantation issues

There a number of specific impediments to investing in plantations that inhibit the full potential of the sector being realised. These largely relate to the equitable treatment of plantations as an agricultural crop, and a lack of recognition of voluntary sustainability initiatives by regulators.

Plantations 2020 has documented the legislative and regulatory frameworks relating to plantation establishment, management and harvesting in each jurisdiction of Australia.

The report titled 'Establishing Plantations in Australia: A Review of Legislative and Regulatory Frameworks' was current at November 2004 and is available in the Reports & Resources section.

Infrastructure

Plantation logs have to be transported from where they are grown to central destinations for processing. These plantations may be located at geographically remote sites through an extensive region. To accomplish this transportation task efficiently, an extensive road, rail and port network is needed.

The plantation industry is working closely with Commonwealth, State and Local Government to quantify the haulage task associated with the rapidly expanding and maturing plantation area.

Infrastructure upgrading and maintenance will be essential if Australia is to be successful in selling wood and wood products in the highly competitive international market.

The expansion of the plantation industry in key regions can provide the impetus for the upgrading of local roads and bridges, the reinvigoration of regional rail networks and the expansion of port facilities to accommodate a new range of products.

The plantation industry makes a major contribution to infrastructure funding through the payment of taxes, fuel excises and local government rates.

Taxation

For more than a decade, taxation has been a theme of debate surrounding development of plantations. A common misconception is that forestry has taxation incentives encouraging plantation development – this is simply not the case.

Plantation establishment costs are legitimate, tax deductible business expenses, and growing plantations in this sense is no different to farming.

Significant impediments to investment in forestry and plantations still remain within the taxation system. These include the "period inequity" problem, where there is a long delay between planting and harvest, resulting in no ability to utilise income averaging, and CGT anomalies in using profit-a-prendre to grant harvesting rights.

Plantations 2020 is committed to identifying specific taxation-related impediments to investment, and providing information for Plantations 2020 Government stakeholders to address these impediments.

TIMA and Australian Forest Growers have prepared an information sheet explaining the tax treatment of Plantation Forestry and the Managed Investment Scheme structure through which much plantation forestry is financed.

The Forest & Wood Products Research & Development Corporation report 'Impediments to Investment in Long Rotation Timber Plantations' was launched in March 2005 by Senator the Hon. Ian Macdonald. The report specifically recommends changes to existing tax arrangements that act to distort paterns of plantation investment, particularly away from long roatation saw log plantations. This report is available at www.fwprdc.org.au.

For more information, go to the Australian Taxation Office.

Market access for small growers

Growers require transparent and readily accessible information on timber processors’ requirements and prices in order to evaluate decisions to invest in plantations.

Basic market information can be found at your State Government forestry organisation website, or alternatively, regionally-specific information can be found at the ANU Market Report site, the AFG’s Farm Forest Line, or the Joint Venture Agroforestry Program.

If you can’t find the information you need, contact your State Government forestry organisation direct.

State Government Forestry Organisations

Encouraging investment in plantations

Private sector investment is essential in delivering the objectives of the Plantations 2020 Vision. Information is required at several levels to enable transparent and repeatable assessment of the plantation sector as a destination for investment.

This includes information on Australia’s international competitiveness, investment and environmental regulatory systems, and market access, plantation valuation and trading mechanisms. Research activities aimed at delivering a long-term competitive advantage to the plantation sector and market transparency for growers are other important priorities. More information can be found at Invest Australia and DAFF.

For managed investment scheme plantation projects, plantation managers provide detailed information according to the Australian Securities and Investments Commission guidelines to allow investors to make informed decisions about investing in plantation forests. Also, to qualify for tax deductions, these projects must conform to the Australian Taxation Office’s Product Rulings program.

Community engagement

The growth of Australia's plantation resources and timber processing industries is linked to strong community support and low environmental impacts of the industry. Rural communities are concerned about the impacts of changing land-use, and better interaction is required to build community support for the sector.

Where there is concern in the broader community about the sustainability of land-use, plantation forestry can be developed as a partial solution to region-specific environmental initiatives while acting as a catalyst for regional development.

Commercial tree crops can provide a long-term solution to a range of long-term land management issues in the Australian landscape, including climate change and salinity.

For more information, go to the Regional Australia website, or to Invest Australia’s Regional Programs.

Plantation Types | Current plantation resource | Key plantation issues