The Commonwealth has a responsibility for improving the economic and social welfare of all Australians. In this context, the Commonwealth has obligations relating to efficient resource use and management, industry policy, employment, and regional growth and development. The Commonwealth has clear policy objectives for the development of the forest and forest products industries in Australia. These objectives acknowledge the important contribution that this industry sector makes to the economic and social welfare of the country, particularly in regional areas.
In making a decision on forest use matters governments must take account of all the potential implications of the decision, including the broader implications of the community's economic and social well-being. Economic and social assessments will therefore form an integral part of the full range of assessments that will be undertaken as the basis for negotiating a regional forest agreement. The Department of Primary Industries and Energy has prime responsibility for ensuring that the Commonwealth's interests and obligations relating to the economic and social assessments are met. These assessments of economic opportunities and social impacts of resource use options will be conducted jointly with the States, having due regard to the States' requirements, processes and data to avoid duplication.
The need to take account of all economic uses of forests is firmly established in the National Forest Policy Statement, which establishes as a national goal the development of internationally competitive and ecologically sustainable wood production and wood products industries. Efficient industries based on maximising value-adding opportunities and efficient use of wood resources will provide the basis for expansion in wood products manufacturing, which in turn will provide national and regional economic benefits.
In addition, governments recognise the commercial and non-commercial opportunities from the use and development of other forest-based resources. These include high-quality water supplies for urban, industrial and agricultural uses, forest-based tourism, mining, and other minor forest products (such as pharmaceutical, honey and seed production). Economic and social assessments, while focusing on development opportunities for wood products industries, will take account of other forest uses, particularly the extent that other uses can be accommodated through management for multiple uses.
In response to the Kelty Taskforce on Regional Development, the Commonwealth has implemented a policy that encourages the establishment of locally based economic development organisations and the development of regional economic development plans. The economic development goals and strategies articulated by these organisations in their plans will be taken into account in any economic and social assessment for a regional forest agreement.
The economic and social assessments will seek to identify resource use and industry development opportunities for the region in question and to determine the possible economic and social consequences of these opportunities.
The main focus of the assessments will be opportunities in forest and forest products industries. Other economic opportunities for the use of regional forest resources-tourism, water resources, mining, and other uses-will also be considered. The assessments will seek to answer a number of questions pertaining to the forest resource and the forest use opportunities in a region. This will assist governments in determining the benefits to the regional and national economy of resource use options.
Among the issues to be considered are the following:
- the nature of the forest resource, its quality and quantity;
- the structure of the industry;
- the resource use options for a forest region-including major and minor forest products, recreation, tourism, mining and water catchments;
- the industry development options-based on resource quantity and quality, market possibilities and industry development plans;
- the combinations of resource use and industry development options that are viable in the region;
- the likely economic and social consequences of forest use options, including employment and economic growth, both for the region and for the broader economy.
Different forest regions may call for very different methodologies; the following are some of the possible methodologies:
- modelling the sustainability of forest use to determine potential resource use, identify sustainable yields, and allow analysis of possible implications of changes in resource allocation;
- surveying the location, capacity and utilisation of existing forest-based industry, assessing its competitiveness in a regional and broader context and evaluating the outlook for current markets;
- assessing the potential of alternative forest uses, including water supply, tourism, recreation, mining and other minor products. This could involve evaluating the market outlook, cost-competitiveness and potential market penetration of alternative regional products;
- assessing regional options for development of wood-based industries, including evaluating the viability of possible industry structures, resource implications and the market potential of new wood-based products. Industry proposals for a region would form the basis of this aspect of the assessment;
- formulating resource use and industry development options covering a range of compatible forest management uses;
- assessing the economic and social impacts of forest use options. This could involve assessment of the potential implications for employment, structural adjustment, demographic and social infrastructure and an evaluation of their potential economic and social costs and benefits. It may also be appropriate to determine community reaction to proposed changes and consider measures to minimise the social impacts of structural adjustment.
The data requirements for economic and social assessments will vary between regions and will depend on a number of factors, such as the nature of the region being assessed, the methodologies used, and the level and type of existing data. In most cases some data will be shared between the economic and social assessments and environmental and heritage assessments.
A review of data requirements for economic and social assessments of a region will be conducted as part of the scoping process; it will consider the availability of suitable data, gaps in required data, and the costs and benefits of obtaining additional data. Existing State data will be used wherever possible. There may be circumstances where full information on the economic potential of a forest use is unavailable but costs and delays make obtaining additional information unjustifiable.
Data on the following subjects will probably be needed for the assessment of economic opportunities and social impacts:
- current forest resources and resource utilisation
- area, forest type, location and tenure for native forests and plantations
- regeneration and plantation areas by year of establishment and species
- wood recovery rates for different uses, species and forest ages
- estimated sustainable yields
- value and extent of commercial non-wood products;
- the potential for plantation development
- land areas suitable and economically viable for new plantations;
- the structure and productivity of, and markets for, the existing wood products industry
- location, capacity, age, product, recovery rates, variable and capital costs
- current employment in forest management, harvesting, transport and processing
- employment multipliers
- resource requirements and allocations
- other key inputs
- demand forecasts;
- the potential value of alternative forest uses, including new wood products, tourism, mining and water catchment
- cost structure of potential new industries
- demand trends for alternative wood products
- extent, value and planned utilisation of mineral resources
- extent, value and planned utilisation of water resources
- extent, value and planned utilisation of tourism and recreation resources
- value and resource availability for minor forest products;
- current and past trends in economic and social conditions in a region
- employment and employment multipliers
- total unemployment and long term unemployment
- value adding
- social infrastructure
- workforce structure and labour skills
- occupational health and safety
- population distribution and demographics
- community attitudes;
- the contribution, or potential contribution, of forest use in a region to economic and social conditions in a State and nationally
- regional, state and international trade
- community attitudes.