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Woodchip Driven Logging in the Otways: An Economic Analysis

National Competition Policy

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Hardwood sawmilling faces a further major threat from National Competition Policy.

A report released in May 1999 by KPMG investigated the compliance of Forestry Victoria hardwood pricing policies to the National Competition Policy. National Competition Policy requires government departments not to be engaged in anti-competitive trade practices. KPMG found that:

Royalty rates and licence fees set by Forestry Victoria for sawlogs are on average 30-60% below market value;

Native forest sawn timber is being undervalued and competing unfairly with other building materials such as softwood, concrete and steel; and

Non-timber forest values such as domestic water supply catchments and the forest based tourism industry are being undervalued

Source KPMG Page 26-28 and 66-73

The State Labor Government is committed to reviewing and raising sawlog royalty rates. A review is currently underway. An independent consultant has been appointed to examine royalty rates charged for native forest sawlogs

This royalty review threatens to raise royalty rates and further erode the financial viability of hardwood sawmills across Victoria




Woodchip Driven Logging in the Otways: An Economic Analysis
	National Competition Policy

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