The state of the forest contracting sector in Tasmania is getting worse by the day.  The issues confronting contractors include uncertain contractual arrangements, inability to obtain finance and, in some cases, re-finance.  Many who want to sell out can’t because of second hand equipment prices and debt levels.

The major principals in Tasmania are struggling to keep the quotas up to the majority of their contractors and continued low production scenarios, which have been in play now for almost 12 months, are causing serious grief.  The effects within many communities and amongst the many businesses that support forest contractors should not be underestimated.

Whilst TFCA applauds the State Government’s efforts to review the contractual arrangements, TFCA echos the calls by the State Liberals for industry restructure arrangements that may include low interest loans and even facilitated exit and consolidation arrangements.  TFCA has been arguing for this for many years and we urge both the Federal and State Governments to act urgently. 

It is obvious that there are too many contractors, especially in the current economic environment, but this situation will not change even when increased production returns because our forest resources are changing.  Letting these business simply ‘wither on the vine’ is not the answer though, especially when you consider the amount of investment involved, the numbers of employees affected and the numbers of supporting businesses left out of pocket.  It is also true that in many cases, the contractors are not too blame for the predicament that that they find themselves in.  Market, forest resource and even contractual arrangements are not something that contractors can control.

Tagged as: Forest contractor difficulties