Chapter 5 Economic and social values - Natural … assessment - red gum/Red... · 5.6 Tourism 125...

Economic and social values

5.1 Overview 110

5.2 Economy of the Riverina bioregion 111

5.3 Structure of the red gum forestry industry on public land 113

5.4 Status of timber resources on public and private land 122

5.5 Other industries in the region’s State Forests 123

5.6 Tourism 125

5.7 Socio-economic profiles of towns of interest in the Riverina bioregion 128

Chapter 5

110 Riverina Bioregion Regional Forest Assessment: River red gum and woodland forests

5.1 Overview

The river red gum forests of the Riverina bioregion contribute to the local and regional economy through the primary industries of timber production, grazing and apiary. The multiple recreational opportunities provided by the forests also contribute to the local tourism industry. The future strength of the Riverina bioregion’s communities – its economy and social fabric – depends on the health of its biophysical landscape, including the river red gum forests.

This chapter provides an overview of the economic and social values supported by the river red gum forests, and supports Step 2 of the analytical framework, by describing the:

• broadereconomiccontextoftheMurrayand Riverina regions

• structureandeconomiccontributionoftheredgumforestry industry reliant on public land

• currentstatusoftimberresourcesonpublicand private land

• currentstatusofgrazingandapiarywithinStateForests

• tourismvaluessupportedbypubliclandwithinthebioregion

• townswithinthebioregionwhichhaveclosetiestotheriver red gum forests and the forestry industry.

The key findings of this chapter are:

• Theforestryindustryrelatedtoredgumforestsonpublicland in the bioregion makes a relatively small contribution to the NSW economy at a regional level (less than 1 per cent).

• However,itisasignificantemployerforseveraltownsintheregion,employing304full-timeequivalent(FTE)staffdirectly related to timber from public land. Commercial operations with licences to harvest timber from public land employ274FTEemployeesandForestsNSWemploys30FTEemployees.

• Ofthe274FTEemployedincommercialoperations, 149FTEstaffworkinmillswhichsourcehigher-qualitytimberfrompublicland.Afurther43FTEworkwithmobilemills which produce sleepers as a primary product. Theremaining82FTEworkinfirewoodoperations.

• Seventownswithintheregionhaveclosetiestotheforestry industry reliant on public land. The twin towns of Barham-Koondrook have the highest number of forestry industry employees based on location of employment. OthercommercialoperationsarelocatedinthetownsofMathoura,Deniliquin,Merbein(inVictoria),BalranaldandDarlingtonPoint.

• Ingeneral,thesetownsarebeingimpactedbytheongoingdrought which is driving a decline in the agricultural industries which form the base of their economies.

• Grazingandapiaryonpubliclandprovideanimportantsource of additional income to farmers and beekeepers in selected years when grasses or flowering shrubs and trees are plentiful.

• StateForestsandNationalParkswithintheregionsupportvery different tourist activities, and tend to attract different types of visitors.

5.1.1 Definition of region

In conducting a socio-economic analysis the typical unitsfor data collection follow human settlement and economic patterns, which differ from biophysical characteristics. Thus, this chapter incorporates the use of three distinct, but similar, definitionsof‘regions’,includingthe:

• biophysicalregion,namelytheRiverinabioregion,includingbothNSWandVictoria

• regionaleconomy,basedonStatisticalLocalAreas, bothNSWandVictorian,withinthebioregion

• tourismregion,coveringthepartsoftheMurray,RiverinaandOutbackregionsinNSW.

Maps outlining the location of each ‘region’ are included atpoints in the chapter where each definition of the ‘region’ is introduced.

Arbuthnot Sawmills and furniture shop at Koondrook

Chapter 5: Economic and social values 111

5.2 Economy of the Riverina bioregion

The gross product for the NSW Riverina regional economy1 was estimated at $4.9 billion2 in 2009. Employment in theregion isdominatedbyagriculture,fisheriesandforestryandrelated processing operations; education and training; and retail sectors. Total employment in the regional economy was 47,511 people, including full-time and part-time workers.

Agriculture, comprising grains, beef cattle, sheep and other agriculture (largely viticulture), constitute the majority of primary industry in the region. Secondary manufacturing is an important part of the bioregion’s economy, contributing 28 per cent of regional product. This is primarily based on food manufacturing. As with most economies, the services sector constitutes the bulkof the tertiary industry. Itprovides47percentofgrossregional product and 63 per cent of employment.

Forestrymakesasmallcontributiontotheregionaleconomy.

The major uses for irrigation water in the bioregion are on pastures or fodder crops for livestock (including dairying), and in rice production, with irrigated agriculture in the region including amixofhorticulture(grapes,citrusandvegetables)andbroad-acre irrigation (rice, cereal, pasture and hay production). However,arecentdeclineinirrigatedagricultureisevidentdueto low-security water allocations.

Figure 5.1 shows the boundary of the Riverina bioregion and the relevant Statistical Local Areas it covers. Two VictorianStatisticalLocalAreaswereincludedtocapturetheeconomicvalue of forestry industry operations based in Victoria whichdraw from forests on NSW public land. The regional economy excludes the major regional centres of Albury and WaggaWagga. It includesthetownsofNarranderaandGriffithnearthe Murrumbidgee River. The southern part of the regionincludesareasofVictoriaalongtheMurrayRiveras farwestas South Australia.

5.2.1 Contribution of the red gum forestry industry reliant on public land at different scales

The forestry industry reliant on river red gum wood from public land makes a relatively minor economic contribution at the regionalandstatelevel.However,atalocalgovernmentlevel,theindustrymakesasignificanteconomiccontributiontothetowns located near the red gum forests. While the red gum forestry industry reliant on wood from public land is a niche component of the overall forestry industry in NSW. it produces a range of specialised products for which other timber substitutes are not readily available.

Given the relatively small size of the river red gum timberresource, the forestry industry reliant on public land hardwood forests of the Riverina bioregion contributes less than 1 per cent of the region’s economy, and by inference an even smaller proportion of NSW’s economy. Compared with a gross product (or value-added) for the bioregion’s economy of $4.9 billion, the forestry industry reliant on river red gum forests on public land makes a direct contribution of $23 million.3

These figures are based on regional input-output analysis,as discussed above. In the time available to conduct thisassessment, the analysis was not able to be extended toexamine the effect of possible changes in timber supply onthe bioregion’s economy. However, as the red gum forestryindustry makes a relatively minor contribution to the economy oftheRiverinaandMurrayregions,impactsasawholecanbeassumed to be minor.

Incontrast,atalocalgovernmentscale,theredgumforestryindustryreliantonpublic landissignificanttoseventownsinthe Riverina bioregion. There are 32 businesses with licences to harvesttimberfrompublicland.WhencombinedwithForestsNSW operations, around 300 FTE employees are directlyrelated to red gum forestry industry reliant on public land. A further 15 contractors and 17 employees of a downstream milling business were identified. Employees work primarilyin the towns of Deniliquin, Barham-Koondrook, Mathoura,Balranald,DarlingtonPointandMerbein.

The red gum forestry industry of the Riverina bioregion is a relatively niche, self-contained sector of the forestry industry inNSW.Given thedifferent typeof timberproduced, the redgum industry is not linked in to regional pulp, sawlog and plywood industry based around the softwood plantations near Tumut. The distinctive colour of red gum timber has facilitated the development of boutique furniture and veneer products (BIS Shrapnel, 2001) that are not easily substituted by otherhardwoods.4Duetoitsdurability,redgumtimberisalsousedfor timber railway sleepers and similar applications requiring durability, such as wharf timbers, in preference to other species.5

1 Forthepurposesofthisanalysis,theNSWRiverinaregionaleconomywasdefinedtoincludetheStatisticalLocalAreasinNSWofWentworth,Balranald,Wakool,Murray,Deniliquin,Conargo,Murrumbidgee,GriffithandBerrigan.TwoStatisticalLocalAreasinVictoria,namelyMilduraRuralCityPartAandGannawarra,wereincludedtocapturetheexpenditureofmillslocatedintheseareaswhichsourcetimberfromriverredgumforestsinNSW.

2 Input-outputanalysiswasusedtoexaminethesizeandstructureoftheregionaleconomy.ThiswasbasedonABS2006employmentdataanda2005–06modeloftheNSWeconomydevelopedbyMonashUniversity.Outputswereindexedto2009values.Theindicatorsusedtodeterminethesizeoftheregion’seconomyincludegrossregionaloutput,grossregionalproduct(value-added),incomeandemployment.Grossregionalproduct,ratherthanoutput,waschosenasthekeyindicatorinthis section because it avoids double counting associated with the purchases of intermediate products. Appendix 9 provides the results of this analysis as well as a discussion of the analytical approach. The underlying assumptions and acknowledged limitations are also covered.

3 Whentheindirector‘flow-on’economicimpactsofexpenditurebytheforestryindustry(seeAppendix 9 for details on methodology and results) and its employees are included, the total contribution of the industry reliant on public land is estimated at $39 million or 0.8 per cent of the gross product of the bioregional economy.

4 WhilesomedegreeofsubstitutionmaybepossiblefromotherAustraliannativehardwoods(notablyjarrah)ordarkredhardwoodsfromSouthEastAsiaandSouthAmerica, these products have a different colour and variously different properties to red gum. Also, as discussed in Chapter 10 of this report, the availability of high quality red hardwood timber in Australia is increasingly constrained.

5 Whileothertypesoftimberarenotusedforsleepers,redgumtimberdoescompetewithconcretesleepersfornewtracks.However,redgumtimberisstillusedforrepairsandmaintenanceonsectionsoftrackwithexistingtimbersleepers(BISShrapnel,2001).

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5.3 Structure of the red gum forestry industry on public land

The NRC conducted a survey of the red gum forestry industry to collect primarydataon the employment and financials ofthe forestry industry value chain and of typical businesses. The purpose of this survey was to understand the structure and size of the red gum forestry industry which sources timber from public land, and to assess its economic contribution to the regional economy. Results from the survey were supplemented by information provided by Forests NSW, drawn from theirmanagement and accounting systems.

In broad terms, the red gum forestry industry can be segmented into:

• largemillswhichfocusonvalueaddingtohigher-qualitylogs

• mobilemills/operationswhichfocusonrailwayandlandscape sleepers, and

• smalleroperationswhichfocusonlowergradeproductssuchasfirewood(‘residueoperations’).

This report primarily considers those operations which source red gum timber from public land. Some of these operations also sourcetimberfromprivateland.Otheroperationswhichsourcetimber entirely from private land are not covered in this report.

The key findings of the industry survey are:

• The‘redgumindustry’isheterogeneousintermsofitsconstituent businesses; this diversity and the vertical integration of the larger mills ensure a high level of utilisation of the harvested resource.

• Eachofthesectorsoftheindustry(largemills,mobilemills/operationsandresidueoperations)appearstobeprofitable.Howeveringeneral,operationswhichfocus onsleepersandfirewoodappeartohavehigherreturnson assets due to their lower cost structures and less asset-intensive operations.

• Totalemploymentintheindustrydirectlyrelatedtoriverredgumtimberonpubliclandis304FTEemployees(thisincludes274 employees of commercial operations with licences to harvesttimberfrompubliclandand30FTEForestsNSWemployees). The survey also indicated 15 contractors and 17 employees of downstream milling businesses have some reliance on timber from public land.

5.3.1 Forests NSW operations

IntheRiverinabioregion,totalroyaltiespaidtoForestsNSWfortimber allocations are $4.3 million per annum. While information onthecostofForestsNSWoperationsintheRiverinabioregionwasnotavailable,theAuditor-General’s2009reportindicatesthatnativeforestoperationsacrossallofForestsNSWestateoperatedatalossof$14.4millionin2007–08(Auditor-GeneralofNewSouthWales,2009).TheAuditor-Generalwasunabletoconcludewhetherthiswasduetooperationalinefficiencyorbecause prices do not reflect the true cost of meeting supply.

Timber supply is allocated to industry either by annual quotas or through parcel sale arrangements on a rolling one-year contractual basis. No long-term commitments are in place for river red gum timber from the Riverina bioregion; however, many of the allocations have been held for a number of years. A base allocation of quota grade sawlogs is made available to sawmills under annual licences. Sawmills and mobile mills also have annuallicencesforbaseallocationsofex-quotagradesawlogs.Inadditiontothis,parcelsalesofex-quotagradesawlogsandfirewoodgeneratedfromthesupplyofquotaallocationsaresoldbytender(BISShrapnel,2001).Somesawlogsandfirewoodfromsilvicultural activities conducted for the purposes of improving forest health are also sold under contract arrangements.

Table 5.1 provides a summary of the different grades of resourcethatForestsNSWprovidestocommercialoperatorsin the red gum forestry industry.

Table 5.1: Summary of forest resources utilised by the forestry industry

Resource Description

Quota Quotasareannualallocationsofquality(‘quota’)sawlogstoCrownsawmills.Around7%ofquotasawlogsareconsideredtobeveryhighqualityandarereferredtoasHQ1sawlogs;othersthatarestillofgoodqualityandsizearereferredtoasHQ2sawlogs.

The renewal of a quota allocation is not automatic but is based on an annual review of a mill’s performance. Inthecaseoftheredgumquotamills,quotashavebeenrenewedeachyearwithoutchangeinvolumeapart from minor adjustments because of small overcuts or undercuts.

TransfersofquotasaresubjecttoapprovalfromtheMinisterforPrimaryIndustries.CompaniesconsideringthesaleoftheirquotamustthereforemakeapplicationtoForestsNSWforapprovaltotransfer.Therehasbeen only one sale of a red gum quota in the last nine years.

Ex-quota Sawmillsalsouseex-quotasawlogsthatdonotformpartoftheirquotaallocation.Thiscategoryincludeslogs that are of good quality but below size limits subject to further minimum limit for utilisation by the sawmiller.

Ex-quotaallocationsarealsoreviewedannuallyanddonothavethesametradeabilityconsiderationsasquota allocations.

Residue Residue includes those parts of the log not suitable for sawn timber that are utilised for landscaping, firewoodorbiofuel.


Inregulatingtheindustry’sactivityonpublicland,ForestsNSWissues four different types of licence (Table 5.2).

5.3.2 Commercial operators

Industry structure

The forestry industry related to public land in the Riverina bioregionisconcentratedamongsixlarge,verticallyintegratedmill operators that carry out activities along the supply chain from harvesting to manufacturing. Smaller businesses operate in parts of the value chain providing services to the larger integrated operations (e.g. by harvesting sawlogs for mills) and harvesting residues for lower-value products. A simple conceptual model of the red gum forestry industry supply chain is shown in Figure 5.2. Most of the larger, integratedmills conduct all operations from timber harvesting through to manufacturing.

Thereisasignificantamountofhorizontalintegrationbetweenindustry members and within mills. Inter-linkages betweenbusinesses have developed in response to the commercial imperatives imposed by large, multi-year contracts for sleepers, as well as economies of scale in marketing and operations. Forexample,RedgumTimberProducers(acollaborationofsixmills) collectively supply around half of the sleepers purchased byVicRailunderasinglecontract.

Businesses involved in the industry can be categorised based on the nature of their operations and the quality of timber they source. Table 5.3 provides a summary of the different types of businesses in the industry that source timber from public land. Inadditiontothesebusinesses,onesignificantlysizedmillthatreliesontimberfromprivatelandwassurveyed.Campbell’sMillat Balranald sources timber products from 13 other operators andfromRedgumTimberProducers,someofwhichrelyonpublic land for timber.

GulpaMill–Deniliquin

Table 5.2: Description of licences issued for industry activities on public land

Licence Description

TimberLicence Authorisation under the Forestry Act 1916thatallowstheholdertotaketimber(trees)asspecifiedinthelicence on Crown timber lands.

ProductsLicence

Authorisation under the Forestry Act 1916 that allows the holder to take products (product of trees or shrubs)asspecifiedinthelicenceonCrowntimberlands.

Contractor’s Licence

Authorisation under the Forestry Regulations 2009 that allows a contractor who is employed by a holder of a timber or products licence to cut, obtain or remove timber or products.

OperatorLicence

Authorisation under the Forestry Regulations 2009 to be held by any person who is engaged or employed to cut, obtain or remove timber or products from Crown timber lands.

Timber supply

Sourced from Crown timber

lands or private lands

Timber harvestingTree felling,

extraction and log loading for

haulage (licensed under Forestry Act on Crown Lands)

Log haulageFrom forest

to mill

MillingProcess logs

to specification of a range of end markets

Manufacturing Value adding businesses

Haulage/transportFinished

product to market

Markets

Integrated mills conduct a range of operations

Figure 5.2: Forestry industry supply chain


As Table 5.4shows,sixquotamillsaccount for themajorityofquotaandex-quotatimbervolumefrompublic land.Eightmobileoperationsaccountfor35percentoftheex-quotalogsand11percentofresiduevolume.Eighteenmobileoperationssource49percentoftheavailablefirewood.

Some of the quota mills source timber from private as well as public land. Table 5.5 shows the proportion of timber from public land for each type of business. The average for quota millsisskewedbytwomillswhichdrawasignificantproportionof their timber from private land. The four other mills draw over 95 per cent of their timber from public land.

While it was outside the scope of this assessment to conduct a full survey of operations that rely on timber from private land, Campbell’sMillhasasignificantsleepersupplycontractwhichissuppliedfromamixofpublicandprivateland.

Table 5.3: Summary of business types

Business type No. sourcing from public land

Description

Fixedlocationmill(Quota)

5 Largermillswithquotalicencesthatareinfixedlocations,usuallyinorneartowns.Thesearegenerallyintegratedoperationsthatconductasignificantproportionoftheir own harvesting operations and transport to the mill.

Mobilemill(Quota)

1 Mobileoperationsthatsourcequotaandex-quotaqualitylogs.Theseoperationsarelocatedclosetothetimbersource.Mostoftheseoperationsalsosourceresidue material.

Mobileoperations (Ex-quota)

8 Mobileoperationsthatsourceex-quotaqualitylogs.Mostoftheseoperationsalsosource residue material.

Mobileoperations(Residue)

18 Mobilebusinessesthatsourceresiduematerials,predominantlyforfirewood.

Table 5.4: Distribution of timber volumes from public land by business type*

Business typeNumber of businesses

Percentage of total base allocation

Quota Ex-quota Residue

Fixedlocationormobilemills**(Quota) 6 100 65 40

Mobileoperations(Ex-quota) 8 35 11

Mobileoperations(Residue) 18 35 49

TOTAL 32 100 100 100

*BaseallocationinformationwasprovidedbyForestsNSW,basedontheirmanagementandaccountingsystems..**Fiveofthemillsarefixed;oneismobile.

Table 5.5: Percentage of total timber sourced from public land

Business type Number of businesses Average percentage of total base allocation from public land

Fixedlocationormobilemills(Quota) 6 74

Mobileoperations(Ex-quota) 8 91

Mobileoperations(Residue) 18 98


Location of businesses

The number and location of each of the businesses sourcing from public land are shown in Table 5.6. Two quota mills which source timber from public land in NSW are located in Koondrook andMerbein,close toNSWbuton theVictoriansideof theborder.Theyhavebeenincludedinthisfinalassessmentreportto provide a comprehensive picture of the economic and social

values supported by the river red gum forests of the NSW component of the Riverina bioregion.

ForestsNSWmanagesthesupplyoftimbertoquotamillswithinthreeManagementAreastominimisethecostoftransportingsawlogs. As Table 5.7shows,thesixquotamillssourcetimberfromwithintheManagementAreainwhichtheyarelocated.

Table 5.6: Number and location of operations

Town of interest Quota mills Ex-quota millsResidue

operationTotal

MurrayManagementArea

Barham-Koondrook 3 2 5

Deniliquin 1 2 3

Mathoura 5 2 7

OtherMurray ManagementArea*

1 3 4

Subtotal 4 8 7 19

MilduraManagementArea

Balranald 5 5

Merbein 1 1

OtherMildura ManagementArea***

4 4

Subtotal 1 0 9 10

Total 6 8 18 32

Murrumbidgee/NarranderraManagementArea

DarlingtonPoint 1 1

OtherM’bidgee/Narra-nderraManagementArea**

2 2

Subtotal 1 0 2 3

* ‘OtherMurrayManagementArea’includesbusinessesbasedatLeitchville,Mulwala,MoamaandRomseywhichsourcetimberfromwithintheRiverinabioregion.** ‘OtherMurrumbdigee/NarranderraManagementArea’includesbusinessesbasedatMurramiandLeetonwhichsourcetimberfromwithintheRiverinabioregion.*** ‘OtherMilduraManagementArea’includesbusinessesbasedatBrokenHillandPomonawhichsourcetimberfromwithintheRiverinabioregion

*InformationwasprovidedbyForestsNSWonthevolumesofquotatimbersourcedfromeachforestbetween2004–05and2007–08.ThisinformationwasdrawnfromForestsNSWmanagementandaccountingsystems.

Table 5.7: Location of mills and sources of quota sawlogs*

Mill name Location

Percentage of quota from each Management Area (MA)

Murray MA

Mildura MA

M’bidgee/ Narranderra

MAMillewa Forest

Pericoota-Koondrook

Forest

Werai Forest

Bonum Sawmill (Rowes TimberIndustries)

Barham-Koondrook 31 69

Arbuthnot Sawmill Barham-Koondrook 23 77

O’Brien’sSawmill Barham-Koondrook 51 49

GulpaSawmill Deniliquin 98 2

MerbeinSawmill Merbein 100

DarlingtonPointSawmill DarlingtonPoint 100


Products and key markets

Asignificantfeatureoftheredgumforestryindustryisitshighutilisation rate of felled logs, achieved through the use of residue productsforfirewood,chips,mulchandsawdust.Fixedmillsproduce a wide range of products, from high-priced furniture grade timber or veneer, through to lower-priced products such as woodchips and mulch. Many mobile mills and operatorsderiveasignificantproportionof their revenue fromfirewoodand residue products.

The major markets for river red gum products are metropolitan Melbourne and regional Victoria. Adelaide, regional SouthAustralia,Canberra and, to a lesser extent,Sydneyare alsodestinations for some products. A small amount of river red gumproductisexported.

While relatively small in volume compared with the softwood plantation industry, red gum products are valued for the unique properties and distinctive appearance of their timber. The durability of river red gum timber makes it appropriate for use as structural timber as well as railway sleepers.

Table 5.8 provides a description of the different river red gum products and the key markets.

The estimated annual volume and range of unit prices for each product for surveyed quota mills is provided in Table 5.9. These estimates are indicative and are based on interviews with quota millsandothersourcesofmarketinformation.Giventhevariationinproductmixbetweenmillsandovertimeinresponsetodemand,they present an indicative picture of what a mill may produce.

The product mix produced by quota mills varies as productsupply contracts change (reflecting changes in demand) and

with variations in thequality of the available resource.Majorcontracts for sleepers are generally several years in length, withVicRailand theSouthAustralian rail industrybeing themain customers. Markets for residue products of firewood,woodchips and mulch tend to be seasonal (BIS Shrapnel,2001).Asaresult,firewoodoperationstendtocuttimberwhenit is available and stockpile it for sale during winter.

Trends in the markets for red gum products over recent years vary depending on the nature of the product. Within the sleeper market, substitution of concrete for timber sleepers for major upgrades of freight rail lines has occurred in recent years. The other major market (by volume) of firewood appears to bestrong and large enough to absorb increased supply of product (BISShrapnel,2001).Thisisconsistentwithdiscussionsheldwith the red gum forestry industry.

Employment

Employment directly related to the management, harvestingand milling of river red gum timber from public land in the NSW component of the Riverina bioregion is 304 full-time equivalent(FTE)staff.Thisincludes:

• 274employeesof32commercialoperationswith licences to harvest timber from public land6

• 30ForestsNSWemployees.

Inaddition,15contractorsprovidehaulageservicestothequotamills surveyed. A downstream milling business which does not have a licence to harvest timber from public land, but which sources timber from those who do, employs a further 17 staff.

Table 5.8: Description of river red gum products

Product Description Key markets

Furnituregrade Timbers for furniture and joinery Melbourne

Veneers Timbers for furniture and joinery Melbourne

Weatherboards Timbers for housing construction Melbourne

Deckingtimbers Timbers for housing construction Melbourne

Sleepers Replacement timbers for railways VictoriaandSouthAustralia

Crossings timbers Timbers for bridges and marine construction (both new and replacement)

VictoriaandSouthAustralia

Gardentimbers Landscapesleepers National,VictoriaandSouthAustralia

Firewood Splitfirewood Melbourne,regionalVictoria,Canberra, SouthAustraliaandLocal

Woodchips Residues used for landscaping Localmarkets,VictoriaandSouthAustralia

Mulch Residues used for landscaping Melbourne,regionalVictoria,SouthAustralia

Sawdust Residues for feedlots Riverina

6 A downstream milling business which does not have a licence to harvest timber from public land, but which sources timber from those who do was also surveyed.


Table 5.10 shows the results of the forestry industry survey by type of business. Employment is dominated by the sixmills with licences to source quota quality timber, which are responsible for over half the employees directly related to river redgumtimberharvestedfrompublicland.Theeightex-quotamills employ around 15 per cent of the workforce and the 18 residue operators employ around 30 per cent.

Consistent with the terms of reference, this assessment has focused primarily on employment directly related to timber on public land rather than private land. Businesses surveyed covered100percentofquotavolume,92percentofex-quotavolume and 70 per cent of residue volume from public land.

Where businesses were not able to be contacted or chose not to participate in the survey, an estimate of their employment was calculated on a pro rata basis using information on their licensed annual base allocation of timber.

The survey of those businesses with licences to harvest timber from public land identified a few businesses which providecontract haulage to the mills or conduct downstream milling. Employmentinthesebusinesseshasbeenshownasseparateitems.Employmentbyotherbusinesseswhichprovideservices(e.g.accounting,transportoffinishedproducts)totheforestryindustry reliant on public land were not included in the survey.

Table 5.9: Estimated volume and range of unit prices (based on products from quota sawlogs)

Product* Estimate of total volume Range of unit prices

Structural, building, furniture and heritage grade

10% $2,000–$2,500

Veneers 1% $2,000–$2,500

Weatherboards 1% $2,000

Crossings timbers 2.5% $1,500–$1,800

Sleepers 25% $600–$700

Deckingtimbers(green) 2.5% $550

Gardentimbers 12% $390–$430

Firewood 35% $100–$120/tonne

Woodchips 7.5% $65–$100/tonne

Mulch 1% $30

Sawdust 2.5% $35

*Categoriesareaggregationsacrossarangeofproductswhichhavebeengroupedonthebasisofprice.

Table 5.10: Employment in the red gum forestry industry reliant on public land (FTE) by business type

Employment category Quota millsEx-quota

millsResidue

operatorsTotal

Employees of commercial operations with timber licences

Surveyed businesses 149 26 48 223

Prorataestimateforbusinessesnotabletobesurveyed* 0 17 34 51

Subtotal employees 149 43 82 274

ForestsNSWemployees 30

Subtotal employees directly related to timber on public land 304

Contractors to businesses with timber licences 15

Employeesofdownstreammillingbusiness 17

*Employmentnumbers forbusinessesnotable tobesurveyedhavebeenestimatedonaproratabasis.This includestwoex-quotabusinessesresponsible for 8percentofex-quotatimberbaseallocations,and11residueoperatorsresponsiblefor30percentofresiduebaseallocations.


SomeofthebusinessessurveyedarelocatedinVictoria,butsource timber from public land in NSW. These businesses employ 57 FTEs. As the location of employment for theseemployees are towns very close to the NSW border (Koondrook andMerbein),staffmayliveineitherNSWorVictoria.

Employeesofcommercialoperationswithlicencestoharvesttimberfrompubliclandhaveamixofskills.Table 5.11 shows the employment breakdown by category for those businesses that were able to be surveyed. The higher proportion of staff inmanagementrolesinex-quotamillsandresidueoperators,when compared to quota mills, may be due to the number of owner operators in these businesses.

Table 5.12showsthelocationbytownofemploymentofFTEemployees of businesses with licences to harvest from public

land. While some employees live in the town in which they are employed, some may live in nearby towns.

Numbers of FTE employees are based on the results of anindustry survey. These were compared to total employment in the relevant urban locality (ABS, 2006) to estimate the percentage of employment in each town directly related to businesses with licences to harvest from public land. This demonstrates the high proportion of industry employment in Barham-Koondrookwherethreequotamillsarelocated.Otherquotamillsare locatedatDeniliquin,MerbeinandDarlingtonPoint. Ex-quota mills are concentrated around Barham-KoondrookandMathoura.

While residue operators are spread across a number of towns, there is a concentration at Balranald.

* Bylocationofemployment.** BasedoncomparingdirectemployeestoABS2006datafortotalemploymentintherelevanturbanlocality.*** Somebusinesseslicensedtoharvestresidueareincludedinthecountofquotaandex-quotamillsasthesebusinesseshavelicencestoharvestresidueaswellas

quotaorex-quotatimber.****OtherlocationsincludeLeitchville,Mulwala,Moama,Romsey,Murrami,Leeton,BrokenHillandPomona.Businesseslocatedinthesetownssourcetimberfrom

within the Riverina bioregion.

Table 5.11: Employment in surveyed commercial operations directly related to public land (FTE) by category

Quota millsEx-quota mills and residue operators

Category FTE % of total FTE % of total

Management 11.5 8 13 18

Administration 15.5 10 5 7

Bush operations 30 20 33 45

Milling 69 46 19 26

Other 23 15 4 5

Total of surveyed businesses 149 74

Table 5.12: Employment in commercial operations directly related to public land (FTE) by town

Town

Direct employees of businesses with licences to harvest

from public land (FTE)*

Estimated percentage of

total employment in urban locality**

Number of businesses with licences to harvest from public land

Ex-quota mills

Residue operators***

Total

Barham-Koondrook (Vic)

119 16 3 2 5

Mathoura 31 14 5 2 7

Deniliquin 28 1 1 2 3

Merbein(Vic) 25 3 1 1

Balranald 24 5 5 5

DarlingtonPoint 20 5 1 1

Other**** 27 N/A 1 9 10

Total 274 6 8 18 32


Table 5.13 shows employment by quota mills by length of tenure of employees. Over half the direct employees ofquota mills have been employed for more than 10 years.

The results of the NRC’s survey provide confirmation ofemployment numbers directly related to the management, harvesting and milling of river red gum timber from public land in the Riverina bioregion. Other published estimates ofemployment in the red gum forestry industry have used different sources of data and have also included estimates of employment in businesses which source timber solely from private land. These estimates were based on a range of methodologies, scales and data sources that make direct comparisons between them difficult.Asummaryofthesepreviousestimatesandthereasonfor differences from the NRC’s surveyed number is provided in Table 5.14.

Informationonbusinessessourcingtimbersolelyfromprivatelandislimited.Thereisaconcentrationofresidueandfirewoodoperators around Balranald which rely on timber from private land. This was confirmed anecdotally by Forests NSW anddiscussionswiththeForestsProductsAssociation(NSW).

Financials

Financial surveys were conducted of all quota mills andselectedex-quotamillsandresidueoperators.Theresultsofthese surveys were used to estimate the contribution to the bioregional economy of the forestry industry reliant on river red gum sourced from public land, as discussed in section 5.2.1 above. Table 5.15 shows different measures of the direct contribution of the industry.

Informationon assetswas also collected for thequotamillssurveyed. Total assets of $44 million are categorised as shown in Table 5.16. The valuation of assets is highly variable, as data includedamixofdepreciationvalue, replacementvalueandinsuredvalue.Manybusinessesdonotplaceavaluationontheirquotalicencessothetotalassetfiguredoesnotincludetheir quota asset (which can be sold with approval from ForestsNSW).

Separate to the analysis of the contribution of the forestry industry to the regionaleconomy, thefinancialsurvey resultswere used to develop indicative discounted cash flow models foratypicalquotamill,amobilemillproducingsleepers/residueandaresidue/firewoodoperator.7

These models suggest that typical operations are profitable.However,mobilemillsandresidue/firewoodoperatorsoperatewith a lower overall cost structure and generate higher returns on assets. This is consistent with findings by BISShrapnel (2001).

Careshouldbetakeningeneralisingtheseresultstospecificoperations within the industry. The results of the discounted cash flow models are only indicative of a typical operation and do not take account of the varying supply volumes, product mixesandinvestmentinequipmentbetweenbusinessesintheindustry. As they are also based on aggregated data provided by a number of businesses with varying accounting practices it is possible that revenues for a typical quota mill have been underestimated and assets over-estimated.

Table 5.13: Quota mill employment by length of tenure (FTE)

Length of tenure (years)

Direct employees of quota mills

(FTE)

Percentage of total

0–1 11 7

1–5 33 22

5–10 24 16

10+ 81 54

Total 149 100

Note:Percentageshavebeenrounded.

Table 5.14: Previously published estimates of employment

Source Estimate Reason for difference from NRC-surveyed employment numbers

GHD(onbehalfofForestsNSW(2009a)

183 EstimatebasedonassessmentofABS(2006)dataandconsultation withexperts.Methodologynotdocumented.

ForestsNSW(2009a) 463 Includes150employeesrelatedtofirewoodoperationswhichsource from private land.

NSWForestProductsAssociation

537 Includesatleast150employeesofbusinessesreliantontimberresourcesourced from private land.

ABS (2006) 1,008 Covers a broader region than the NSW portion of the Riverina bioregion which encompasses the softwood plantations around Tumut; includes forestry from white cypress, plantations, and on public and private land; includes job categories not directly related to red gum forestry industry.

7 Thesemodelswereconstructedtoreflectvariationsinthequalityoftimberusedasinputsandthetypeofproductsproducedbydifferentoperations.Giventherangeofdifferentsupplyvolumes,productmixesandstatusofequipment,judgementwasappliedtomodelbusinessesthatwererepresentativeoftheindustryasawhole.See Appendix 9 for a description of the methodology.


5.3.3 Cost-benefit analysis

Cost-benefitanalysisinvolvestheidentificationanddescriptionofallcostsandbenefitsatastatescale thatmayariseasaresult of any change in public land management considered by the NRC. Cost-benefit analysis considers market valuesassociated with industries that rely on them, as well as values thatarenotmarketed. In thepreliminaryassessment report,cost-benefitanalysiswasconsideredasapossiblemethodtoprovidean indicationof the likelyscaleofnetsocialbenefitsof the NRC’s recommendations, but not as an analytical framework for decision-making.

Whilecost-benefitanalysiscanprovideauseful indicationofthe relative value of market and non-market values associated with environmental assets, it has inherent limitations. These include issues related to how non-market values are estimated; thefactthat‘real’costsareincurredatalocalorregionallevel,whereasimputedbenefitsoccuratastatelevel;andthefactthat achievement of environmental outcomes may not be directly tied to policy recommendations.

ThetypeofchoicemodellingthatwasusedbytheVictorianEnvironmental Assessment Council (VEAC) to estimate thenon-marketvalues,suchasexistenceorprotectionvalues,offorestscoveredbytheVictorianassessment,involvescomplexand lengthy research that could not be conducted for NSW in the time available for this assessment. The NRC decided againstusingtheresultsoftheVEACassessment,duetothedifferentcontextinwhichthatresearchwasconducted.

Therefore,theNRChasnotconductedcost-benefitanalysis,but has focused its attention on assessing the local market values associated with the forestry industry reliant on public land; the status of timber resources; the environmental values; the social, cultural and heritage values; and the requirements for ecologically sustainable management of the forests, all of which arediscussedextensivelyinothersectionsofthisreport.

River red gum sleepers

Table 5.15: Direct contribution of the red gum forestry industry reliant on public land (2009 dollars)

Measure Direct contribution

Turnover(Grossoutput) $48 million

Turnoverlessexpenses(value-addedthroughproductionactivities) $23 million

Income(wagespaidtoemployeesandimputedwagesforbusinessowners) $11 million

Table 5.16: Breakdown of assets by category

Asset type Estimated value

Property $9.65 million

Buildings $10.49 million

Machineryandprocessingequipment $16.6 million

Mobileplant $7.3 million

TOTAL $44.04 million


5.4 Status of timber resources on public and private land

5.4.1 Resources of river red gum timber on public land

The Forestry Act 1916covers‘Crowntimberland’comprisingStateForests,leasedCrownlandandprivatelandoverwhichthe government retains the right to take timber, as discussed in Chapter 3 of this report. Timber licences to harvest timber fromthesepubliclandsaregrantedbyForestsNSW.8

Inaccordancewiththefirsttermofreference(Appendix 1), the scope of this assessment covers all public land, including all categoriesof‘Crowntimberland’.HowevertheprimaryfocusisareasofStateForests.

Table 5.17 shows the total base allocation of river red gum timberperannumfromtheareaslicensedbyForestsNSWforharvesting.Actualvolumesofquotaandex-quotalogsharvestedover the past 14 years have closely matched base allocations, withsomeinter-yearvariations.Volumesofresidue,ontheotherhand, have steadily increased over this timeframe.

The areas licensed for harvesting are separated into three ManagementAreas.Table 5.18 shows the breakdown of annual quotavolumesbytheseManagementAreas.

5.4.2 Resources of river red gum timber on private land

In contrast to timber on public land, the size and quality ofthe resource available from private land is highly uncertain. Widely quoted estimates that half of the total timber utilised by the forestry industry is sourced from private land are based onveryhigh-levelareaestimatespreparedin2001byForestsNSWandBISShrapnel.Available evidence suggests timberresources on private land are unlikely to provide the security of supply or quality of timber currently sourced from public land.

HarvestingoftimberonprivatelandisregulatedbyDECCWunderthe Native Vegetation Act 2003 and Native Vegetation Regulation 2005.Privatelandisconsideredinthisfinalassessmentreporttoprovidecontextforthetotalresourceofriverredgumtimberavailable throughout the NSW portion of the Riverina bioregion, consistentwiththefirsttermofreference.

Forests NSW has estimated that volumes of river red gumtimber harvested from private land (including areas outside the bioregion) are in the vicinity of the volumes harvested from publicland(ForestsNSW,2001).AreviewbyBISShrapnelin2001confirmedthemagnitudeof thesefigures,butwasnotable to usefully improve their accuracy9(BISShrapnel,2001).

Commentary by BIS Shrapnel based on surveys of privatelandholders suggests that most of the river red gum timber on private land near major mills has already been heavily logged (BISShrapnel,2001).Thesamereportsuggestedthatsupplyof quality logs from private land is likely to be highly variable, given the wide variety of the current condition (as at 2001) and management history of these forests.

Surveys of the major quota mill operators conducted for this assessment indicate that only two mills source significantvolumes from private land, and these mills have a focus on producing lower-grade products from lower-quality timber. Other mills which have pursued a ‘value-adding’ strategypresumably would source high-quality timber from private land, were it available, but are not doing so.

Therearenotableexceptionstothesegeneralisations,suchasthe long-term management of river red gum timber on private landbyMerbeinSawmills,buttheNRC’sassessment isthattheyhavebeentheexceptionratherthantherule.

In conclusion, the balance of available information suggestsriver red gum timber resources on private land are unlikely to match those on public land in volume or quality.

Table 5.17: Summary of base allocation of river red gum wood from NSW State Forests and Western Lands Leases*

Resource Base allocation (per year)

Quota logs 31,010 m3

Ex-quotalogs 28,107 m3

Residue log 101,548 tonnes

Table 5.18: Base allocation volumes by Management Area*

Resource Quota (m3/year) Ex-quota (m3/year) Residue (tonnes/year)

MurrayManagementArea 23,450 17,607 63,148

Mildura,MurrumbidgeeandNarranderaManagementAreas

7,560 10,500 38,400

Total 31,010 28,107 101,548

*InformationasatAugust2008–09wasprovidedbyForestsNSW,drawnfromtheirmanagementandaccountingsystems.

*InformationwasprovidedbyForestsNSW,drawnfromtheirmanagementandaccountingsystems.


5.5 Other industries in the region’s State Forests

5.5.1 Grazing

GrazinginStateForestshasoccurredformorethan150years.The forests provide palatable species and water sources that are suitable for cattle production. While the forests provide a feedsourcetofillthewinterfeedgap,theyprovideamarginaladditional value to graziers, rather than being a primary resource for the grazing industry.

GrazingislicensedbyForestsNSWandguidedbytheForestsNSW Grazing Strategy. Graziers are issued either short-termgrazing permits or annual occupational permits. Occupationalpermits describe the area able to be grazed; the time of the year when grazing is permitted; and management activities to be conducted,suchasweedandpestanimalcontrol.ForestsNSWestimates that the current occupation permits for grazing cover some115,000hectaresoutofatotalofapproximately160,000hectaresofdedicatedStateForestsmanagedbyForestsNSW.Thissupportsanestimated7,000headofcattle(ForestsNSW,2008). Figure 5.3 shows the broad distribution of grazing permits issued within the NSW portion of the Riverina bioregion.

8TheForestryCommissionofNSW(currentlytradingasForestsNSW)isconstitutedundersection5oftheForestry Act 1916. Section 27A of the Forestry Act 1916 allowsfortheForestryCommissiontoissuetimberlicencestotaketimberonCrowntimberlands.

9ThisstudycompileddatafromarangeofsourcesonNSWriverredgumforestsonprivatelandwithinthelowerMurrumbidgee/Lachlan,Wakool,Edward,KoondrookandMillewa forestareas,and therefore includedareasoutside thebioregion.Whileacknowledging the limitationsofavailabledataonareaandtypeof forests, thestudyestimatedthatapproximately136,000hectaresofredgumtimberonprivatelandwasavailableforcommercialharvesting.

StockgateinEuroleyStateForest–photocourtesyofDECCW

Livestockgrazing

Fig

ure

5.3:

Gra

zing

per

mits


5.5.2 Apiary

State Forests are a valued resource for the apiary industry.The honeybee industry has used the river red gum forests in the Riverina bioregion for over 100 years. River red gum is a valued species for honey production and supports both NSW andVictorianapiaries. In addition, theStateForestsproviderehabilitation areas, enabling apiarists to rebuild the strength andhealthofhives.Duetotheavailabilityofwater,theforestsare also useful drought reserves for the apiary industry.

ForestsNSWissuespermitsthatallowanapiaristtosetdownhivesinadefinedarea.Thepermitgenerallycoversa1.5x1.5squarekilometrearea. In2005–06,ForestsNSWissued461OccupationPermitstoapiarists.

There are an estimated 600 sites within the assessment area that are suited for beekeeping. Further to this, submissionsreceived by the NRC estimate that there are between 40 and 50 beekeepers who utilise the Millewa Forest and a further 15to20intheMoiraForestareaalone.

Pollination is usually short term (3–4 weeks); however, thepresence of river red gums supports the hives for the remainder of the year. Flowering of river red gum is largely dependenton suitable flooding so, although this species can produce high-qualityhoney,significantproductionisrelativelysporadic(VEAC,2008).

5.6 Tourism

TheStateForestsoftheRiverinabioregionhavealonghistoryofuse by surrounding communities and visitors to the bioregion. Tourism values are connected to the river, beaches, trails and natural surroundings of the bioregion. The most popular sites are the weir pools and the white sandy beaches found at the bendsof theMurrayRiver,bothhavinghighaestheticvalue.

Manygenerationsoffamilieshavespenttimeexperiencingandenjoying visits to these areas and participating in the activities they support.

TheMurray,Murrumbidgee,EdwardandLachlanriversprovidea focus point for many outdoor activities, while the adjoining State Forests provide access and complementary facilities.Goodaccess,waterandcloseproximitytourbanareashaveensured the bioregion’s continued popularity for tourism activities associated with the iconic red gums, rivers and wetlands.

5.6.1 Importance of tourism in the region

TourismdataarecollatedusingLGAswhichcombinetomakeregions. The NSW portion of the Riverina bioregion includes partsoftheMurray,10 Riverina11andOutback12 tourism regions. As shown in Figure 5.4, theMurray tourism regioncontainsareas of high recreational value which are situated along the southern border of NSW (i.e. along the Murray River). TheRiverina tourism region contains other areas of recreational value situated in the eastern central Riverina region.

The combined three tourism regions received 4.3 million visitorsin2008,with6millionvisitornights.Holidaysorleisurewere the most common reason given for domestic overnight visits to these tourism regions; namely, 50 per cent for the Murray,49percentfortheOutbackregionand31.5percentfortheRiverinaregion.IntheMurrayandtheOutbackregions,the most popular accommodation option was ‘Caravan orcamping near road or on private property’. This reflects the holiday or leisure purpose of the visits.

Since 2005, domestic overnight visitor numbers have been on adownwardstrendacrossallthreeregions.TheMurrayregionhas seen a 31 per cent decline in domestic overnight visitor numbers, and the Riverina region, a 28.5 per cent decline, while theOutbackregionexperiencedonlya3percentdecline.

10 TheMurrayregioncomprisesthelocalgovernmentareasofAlbury;Berrigan;CorowaShire;GreaterHumeShire;Jerilderie;Murray;Urana;andWakool.

11 TheRiverinatourismregioncoversthelocalgovernmentareasofBland;Carrathool;Conargo;Coolamon;Cootamundra;Deniliquin;Griffith;Gundagai;Hay;Junee;Leeton;Lockhart;Murrumbidgee;NarranderaTemora;andWaggaWagga.

12 TheOutbackregioncoversthe localgovernmentareasofBalranald;Bogan;Bourke;Brewarrina;BrokenHill;CentralDarling;Cobar;UnincorporatedFarWest;Walgett; and Wentworth.

Fishingisapopularrecreationalactivity

Fig

ure

5.4:

To

uris

m r

egio

ns (b

y LG

A)


ThetotalannualtourismexpenditureforthesethreeregionsintheyearendingMarch2009was$1.197billion(TourismNSW,2009a, 2009b, 2009c). Table 5.19 provides an overview of the valueoftotaltourismintheMurray,RiverinaandOutbackregionsfortheyearendingMarch2009.Thethreeregionscombinedaccountforapproximately5percentofthetotalvalueoftourism to NSW.

Table 5.20 provides an overview of the source of visitors for each region. Anecdotal evidence from the NRC’s tours of the bioregion indicated that the areas in the assessment in theRiverinaandOutbackregionsalsorelyuponamajorityofVictorianvisitors.

Unfortunately,tourismdataspecifictotheNSWriverredgumforestsineitherStateForestsorNationalParksisverylimited.However,ForestsNSWestimatesthattheriverredgumforestsexperienceanestimated500,000visitordaysperyear(ForestsNSW, 2008), bringing expenditure into local and regional areas (Table 5.21).

YangaNationalParkhasonlyrecentlyopened.Currentlythereare no data on the social and economic value the park provides to the community, although there are ambitious projections forsignificanttouristnumbers.Theparkhas13caravansitesand26campingsites.Thereisnotsufficientevidencetodateof the economic impacts of transferring State Forests intoNationalParks.

Specificdataforindividualtownsinthestudyareaarelimited;however, tourism data by LGA provides an indicator of theimportance of tourism at a regional level.

Table 5.21 shows the number of visitors and estimated expenditureofvisitorsintheLGAsoftownsofinterest.Tourismnumbersandexpenditureassociatedwithindividualiconsitesare obviously smaller than to the region as a whole.

Available data sources describe tourism activity as a whole and not specificallytourismthatisconnectedtoriverredgumforests.

Table 5.19: Overview of total tourism in the region (Tourism NSW, 2009a, 2009b, 2009c)

Region Expenditure ($)’000 total visitors

’000 visitor nights

% of visitors to regional NSW

Murray 418 1,555 2,365 4.2

Riverina 523 2,019 2,014 5.1

Outback 256 702 1,660 2.8

Table 5.20: Overview of the visitor source for each tourism region (Tourism NSW, 2009a, 2009b, 2009c)

Region Murray Region Riverina Region Outback

VisitorsfromVictoria 62% 25% 22%

VisitorsfromregionalNSW 19% 42% 39%

VisitorsfromSydney 8% 20% 13%

Notes:IncludesmajorregionalcentressuchasAlburyandWaggaWagga.Expenditurevaluesexcludeairfaresandlongdistancetransportcosts.

Table 5.21: Visitor numbers and estimated expenditure in LGAs related to towns of interest (Tourism Research Australia, 2008a, 2008b, 2008c, 2008d)

Local Government Area (LGA) Annual visitors to LGA Estimated expenditure Notes

Wakool Shire 80,000 $26 million IncludesthetownofBarham

GanawarraShire(VIC) 62,000 $14 million IncludesthetownofKoondrook

DeniliquinShire 97,000 $25 million

MurrayShire 78,000 $33 million IncludesMathoura

MurrumbidgeeShire - - Datanotavailable

Balranald Shire 38,000 $7 million

MilduraRegionalShire 465,000 $153 million IncludesthetownofMerbein

Total 820,000 $258 million


5.7 Socio-economic profiles of towns of interest in the Riverina bioregion

Seven towns within the region have close ties to the river red gum forestry industry reliant on public land. Consistent with the general trend in the rest of the Riverina bioregion, these towns are being impacted by the ongoing drought which is driving a decline in the agricultural industries which form the base of theireconomies.Socio-economicprofilesofeachofthetownsare presented below, based on available statistical data and discussionswithLocalCouncilsinsometowns.Theseprofilesalso draw on Chapter 10 of this report, which used statistical indicators of economic, physical, human and social capital to assess the capacity of each town to adapt to changes in the industries most likely to be impacted by water scarcity, climate variability and climate change.

5.7.1 Barham-Koondrook (NSW/Victoria twin towns)

Barham (NSW) and Koondrook (Victoria) are twin towns ontheMurrayRiver,withacombinedpopulationofapproximately2,000. Barham is the largest town in the Wakool LGA, withothertownsintheshire includingMoulamein,TooleybucandWakool.KoondrookislocatedintheGanawarraShire(Victoria),which includes the larger centres of Kerang and Cohuna. Swan Hill (75 kilometres), Deniliquin (98 kilometres) and Moama/Echuca(90kilometres)arethenearest largerservicecentresfor the twin towns.

The towns have a number of local services, including a hospital, medicalcentres,schools,banks,postofficeandpolicestation,as well as retail and dining businesses. Key local tourism attractions include river-based activities such as fishing,camping and river cruises, and sports and recreation (e.g. golf). The red gum industry, in addition to the forests themselves, is also a key tourist attraction.

The population of Barham-Koondrook increased between 1996 and 2006; however, the growth was predominantly in KoondrookontheVictoriansideoftheMurrayRiver.Populationgrowth on both sides of the river was primarily in older age groups,withanaverageageof50in2006(GHD,2009).Theproportion of retirees and unskilled workers in Koondrook is well above the regional average. The town has a very high proportionofadultswithnopost-schoolqualification(refertoSection 10.5).

Since 2006, the population growth trend is reported to have reversed, with working families migrating out of the area to seekemployment.Higherlevelsofpopulationmobilitymaybeconsidered to reflect lower levels of social cohesion (refer to Section 10.5). This out-migration is believed to be a result of the intensifyingdrought(GHD,2009).Thedroughthasalsoseenmajor declines in the rice and dairy industries, with the number of dairies reducing from 27 to 2 in the last two years. Such declinesarereportedtohavehadsignificantconsequencesforemployment,investmentandspending(GHD,2009).

Despite the drought there have been no recent closures ofbusinesses or services, although one doctor has recently left town and the number of police has declined. Similar to other towns, the out-migration of working-age families has had negative flow-on effects to community organisations, with theSESunitandCountryWomen’sAssociationstrugglingtomaintaintheiractivities(GHD,2009).

Combined, the two towns have three major sawmills and two ex-quotamillswhichsourcetimberfrompublicland.Togetherthesebusinessesemploy119FTEemployees,whichaccountsfor 17.2 per cent of Barham’s working population and 15.4 per cent of Koondrook’s working population. This indicator alone –thatoneinsixworkersinthetwintownsisemployedbytheforestry industry – suggests Barham-Koondrook is sensitive to any potential industry changes.

Township of Barham


The town also has two river red gum furniture businesses. The twin towns host the annual Red Gum Showcase – an event that highlights the importance of the industry to the local community.

There is a strong local connection to the forests of Koondrook-PerricootaandGunbower.

Tourism Research Australia (2008d) estimates a total of 80,000 people visit the broader Wakool Shire area, and spend a total of $26 million each year. For the Ganawarra Shire (Victoria),which also includes the larger centres of Kerang and Cohuna, Tourism Research Australia (2008e) estimates a total of 62,000 visitors, with a total spend of $14 million per year.

5.7.2 Deniliquin (NSW)

Deniliquin,atownofapproximately7,500peoplelocatedonthebanksoftheEdwardRiver,isthecentreoftheDeniliquinLGA.TheDeniliquinLGAissmallinarea(approximately140squarekilometres) and encompasses the town and its outskirts. Being the third-largest town in the Riverina bioregion, Deniliquin isa service town for a number of smaller towns in the region, includingWakool,Conargo,Berrigan,FinelyandJerilderie.

KeycommunityservicesinDeniliquinincludehealth,education(including primary and secondary schools, a community college and a campus of the TAFE Riverina Institute), commercial,governmentandsocialservices.Deniliquinistheadministrativecentre of Murray Irrigation Limited, which provides irrigationinfrastructure services to an estimated 1,200 farmers in the Murray IrrigationArea, and the townhasanactivechamberof commerce.

Deniliquinhadstrongeconomic,humanandphysicalcapitalrelative to the other towns in the analysis. Although it had lower

rates of home ownership, it outperformed the regional average formostoftheeconomiccapitals.Inrelationtohumancapitals,Deniliquinappearstohavesimilarresultsrelativetotheregionalaverage.Itwasalsotheleastremoteofallofthetowns,whichindicates it has greater access to important services, such as health and emergency services (refer to Section 10.5).

Deniliquin’spopulationhasbeeninastateofdeclineoverthelastthreecensusperiods(witha4.5%decreasebetween2001and2006).TheDeniliquineconomyhashistorically reliedonthe irrigation sector (predominantly rice and dairy), although the droughthasseenasignificantdeclineintheseindustries.Forexample,thetown’sricemillandabattoirhaveclosedinthepastthree years and there has been a reduction in employment in theirrigationsector.Anestimated20.7FTEpositionswerelostfromMurrayIrrigationLimited(MurrayIrrigationLimited,2009)and in 2007, Sunrice made an estimated 180 jobs redundant inthetownsofDeniliquinandColeamballywiththeclosureofrice mills (ABC, 2007).

Increasingly both farm and town families in Deniliquin aremoving to mining areas in West Wyalong, Queensland or Western Australia, or family breadwinners are moving to follow thiswork,whiletheirfamiliesremainbehind(GHD,2009).ThedecliningpopulationinDeniliquinishavingimpactsonthesocialfabric of the town, with community clubs and other volunteer organisationsstrugglingtomaintainmembership(GHD,2009).

The forestry industry in Deniliquin is focused on the GulpaSawmill. The operation has recently invested in new buildings and has established a dedicated enterprise that is focused on providing high-quality building timbers. The mill is one of the largest employers outside of local government, health and education. In addition to this mill, there are also two majorresidue-processing operations. Together, these businesses employ28FTEstaff.

GulpaMillatDeniliquin


Tourism in Deniliquin is focused on the region’s naturalattractions.StateForestsaredestinationsforcamping,bikingandbirdwatching,andtheEdwardRiverattractsvisitors forriver-based recreation such as kayaking, swimming, fishingandwater-skiing.ThetownishosttotheDeniUteMuster,amajor annual event that attracts an estimated 5,000 people to the town each October. Tourism Research Australia (2008c)estimates a total of 97,000 people visit the region, and spend approximately$25millioneachyear.

5.7.3 Mathoura (NSW)

Mathoura,withapopulationofapproximately650,islocatedin the Murray LGA. The major town in the Murray LGA isMoama(anditstwintownEchucalocatedinVictoria),whichisapproximately42kilometresaway.Moama-EchucaisamajorservicecentreforMathoura.

Mathoura, the second-largest town in Murray Shire, hasexperiencedlimitedpopulationgrowth;however,thereareanincreasing number of retirees in the town, reflected in low labour forceparticipationandunemploymentrates. Itspopulation isaging, with a high proportion of individuals aged over 65.

AmultipurposeVisitorandBusinessInformationCentreisthefocalpoint for the delivery of services in the town. This centre houses a sub-branch of Bendigo Bank, access points for Centrelink and Medicare, tourism information and various business services.OtherservicesinMathouraincludeaprimaryschool,postofficeandpolicestation.Therearetwohotelsandoneclub.Mathourahas an active chamber of commerce and a local newspaper.

Key industries in the town are timber, agriculture and tourism, as well as the service industries that support them. Mathoura has three secondary sawlog quality mills and tworesidue operations, which combined are estimated to employ 30 people. Between 2007 and 2009, several new business ventures intheMathouratownshiphavebeenestablishedandfailed.

Ofthetownsexamined,Mathourahadthehighestproportionofindividualswithnopost-schoolqualification.Mathouraalsohad weak economic variables relative to the other towns, given its very high proportion of low-income households and high rate of unemployment. Furthermore, only a third of thepopulation has access to the internet, which is well below the regional average. However, It has a strong cross-section ofcommunity service and interest organisations and a high rate ofvolunteerism(25%ofthepopulation)(GHD,2009).

ThereisastronglocalconnectiontothenearbyStateForests,including the Barmah, Millewa Moira and Gulpa Island StateForests.

The town is supported by five ex-quota sawmills – Carroll,Colturi,Crump,HillandCrane–andtworesidue-processingoperations which source river red gum timber from public land. Together,thesebusinessesemploy31FTEstaff.

The Murray River and its forests are the focus of tourism inMurray Shire. Mathoura hosts several annual events thatattractvisitors,includingtheMathouraFishingClassicandtheCadellCountryFair.

5.7.4 Darlington Point (NSW)

DarlingtonPointisasmalltownofapproximately1,000peoplelocatedonthebanksoftheMurrumbidgeeRiverinthenorth

oftheMurrumbidgeeLGA.Coleambally,theothermaintownwithintheLGA,isapproximately30kilometresaway,andGriffith(38 kilometres) in the adjoining shire is a major service centre forDarlingtonPoint.DarlingtonPointactsasadormitorytowntoGriffith,andassuchtheviabilityoftheeconomyofDarlingPointisintegrallylinkedtothatofGriffith.

Key services in Darlington Point include a police station,post office, aprimary school, community health service andswimming pool.

Population in Darlington Point increased by 17.5 per cent in2006and12.7percent in2001,due tosignificantlycheaperland prices attracting young first-home buyers and olderretirees. This growth has slowed in recent years with a decline in the rice industry, including rice mill closures and cessation of rice production due to water shortages. Historically, irrigatedagriculture and the processing of agricultural products especially ricehavebeenkeyindustriesinMurrumbidgeeShire.Therecentdrought and low water allocations have resulted in a decline in production and income based on irrigated agriculture. Census data for 2001 and 2006 showed employment declines in agriculture, wholesale and construction, reflecting the loss of rice growing and processing industries, and a slowdown in local residential construction. Despite downturns in recentyears, there is evidence of increasing prosperity, with several new businesses opening and the retention of services such as policestation,primaryschoolandpostoffice,andsportingandcommunity groups.

DarlingtonPointscoredlowcomparedtotheregionalaveragefor most of the statistical indicators of economic, human, physical and social capital. This suggests it may be highly sensitive to change. It has just over 1,000 people and hasexperienced some population growth over the last censusperiod(3.3%,comparedwith12.7%between1996and2001).Of the towns analysed, Darlington Point had the largestproportion of Indigenous residents (17.2% compared to theouterregionalNSWaverageof6.0%).Furthermore,DarlingtonPointhadthehighestlevelofemploymentinlabourandrelatedwork(31.3%comparedtotheregionalaverageof14.6%),butabelow-averagelevelofunemployment(4.2%).

Ofallthetowns,DarlingtonPointalsohadthehighestlevelofpopulation mobility and the lowest level of volunteering, which together suggest there is likely to be less social cohesion within the community (refer to Section 10.5). DarlingtonPoint has sporting, charity and community groups, and hasa volunteering rate of 16.5 per cent of the population over the ageof15(ForestsNSW,2009a).

Walking,camping,fishingandotherwater-basedactivitiesonthe Murrumbidgee River is the focus of tourism activities inthedistrict.TourismdataforDarlingtonPointandthebroaderMurrumbidgeeShirearenotavailable.

TheforestryindustryinDarlingtonPointisfocusedonamajorfixed mill (Darlington Point Sawmill), which employs 20 FTEstaff. The mill is the only significant holder of quota withintheNarrandera andMurrumbidgeeManagementAreas. Thebusiness is a highly integrated mill. As the mill has adjusted tolowertimbersupplyvolumesandqualityithasextendeditsfirewoodenterprisethroughinvestmentinadditionalmachinery.The mill is one of the few secondary industries in a town dominatedbyservice industries.Manypeoplewho reside inthetownareemployedinGriffith.


5.7.5 Balranald (NSW)

Balranald,locatedontheSturtHighwayandonthebanksoftheMurrumbidgeeRiver,isthemaintowninthetheBalranaldShire. The total shire area is approximately 21,400 squarekilometres, with a total population of 2,440 (ABS, 2006). OthertownsandlocalitiesintheshireincludeEuston,Kyalite,Hatfield,Penarie,ClareandOxley.

Key services in Balranald include retail (supermarkets, clothing); accommodation (motels, caravan park); registered clubs, hotels, restaurants and food outlets; health and emergency services (medical centre, pharmacy, hospital, ambulance, fire brigadeand rescue service); and education (primary school). The regional centresofSwanHill (adistanceof92kilometres)andMildura(158 kilometres) provide services not available in Balranald.

Relative to the other towns, Balranald had strong social capital related to its low population mobility, low cultural diversity and high levels of volunteering, and therefore may be in a better position to adapt to change.

Balranald’s population has declined significantly since 1996.AhighproportionofitspopulationisIndigenous(8.1%).Whileagricultural employment was found to increase in the last census period, this gain is now thought to have been lost due to production slowing down and properties amalgamating. Since 2006, there has also been a reduction in an estimated 24 jobs in education as a result of the relocation of distance education services.

The Council is the largest single employer in the town, with 50 staff (GHD, 2009). Public administration, and safety andhealth care and social assistance have grown and continue to grow with the building of a new hospital.

The forestry industry in Balranald comprises a major wholesale timber company – Campbell’s Sawmills – and smaller operations thatsupplyCampbell’swithsleepersandfirewood,orsourcefirewoodtoon-selltootherwholesalersordirecttoconsumers.Campbell’s Sawmills operates a mobile mill which harvests timberfromareasfurtherafieldthanBalranald,andhasrecentlyoperatedaroundLakeCargellicoandDarlingtonPoint.

The industry is generally reliant on timber resources sourced fromprivateland.However,fiveresidueoperatorsarelicensedto harvest timber from public land. Campbell’s Sawmill also sources some timber (predominantly sleepers) from small operations and Redgum Timber Producers Pty Ltd, whichsource products from both public and private land.

Surveyed employment in the part of the red gum forestry industrywitharelianceonpublic land indicates24FTEstaffare employed by residue operators with licences to harvest from public land. Campbell’s Sawmills, which does not have a licence to harvest timber from public land, but sources timber from those who do, employs a further 17 staff.

Recent investigations by Balranald Shire Council estimate that 109 people rely on the forestry industry on public and private land for their primary source of income, while an additional 49haveasecondaryreliance.Inadditiontherearelocalbusinessesthat supply inputs such as fuel and tyres and services such as auto-electric and engineering to forestry industry businesses.

Balranald is theclosest servicecentre toYangaandMungoNational Parks. Camping and fishing on the MurrumbidgeeRiver are the focus of tourism activities in the district. Tourism data for theBalranaldLGAestimates that theshire receives38,000 visitors, who spend a total of $7 million (Tourism Research Australia, 2008a).

FrogsculptureBalranaldVisitorsCentre–photocourtesyofWikipedia


Balranald has a very high incidence of community volunteering (33.8%)withaneworganisation,BalranaldInc,formedin2007toexploreandenhancethefutureofthecommunityandeconomy(ABS, 2006).

Inrelationtohumancapital,Balranaldhadhigherproportionsof retirees and individuals employed as labourers, compared to the regional average. Relative to the other communities of interest, Balranald also had weaker economic capital relating to its lower levels of home ownership and higher levels of unemployment (refer to Section 10.5).

5.7.6 Merbein (Victoria)

Merbein,locatedinVictoria,isasatellitetownofthelargeregionalcentre of Mildura, which is approximately 12 kilometres away.WithintheMilduraRuralCityLGA,withatotalpopulationinexcessof60,000,Milduraistheprimaryservicecentreforresidentsandbusinesses inMerbein.Assuch,Merbeinhasagoodrangeoffacilities and services, with a greater range of services accessible in Mildura. Population growth was strong between 2001–06(8.3%),withaffordablelandandhousingattractingnewresidents(GHD,2009).Merbeinalsoexperiencedsignificantgrowthin itsIndigenouspopulationoverthelastcensusperiod(26.3%),withIndigenousyouthaccountingfor9%ofthepopulationagedlessthan 24 years (ABS, 2006).

Located within the Sunraysia region, Merbein is a centre ofirrigated horticulture production, including the production of wine grapes, dried fruits and citrus. There has been some decline in horticulture in recent years with periods of low

commodity prices and reduced water allocations. Two large processors,McGuigan’sWinesandSDSBeverages,aremajoremployersintheMerbeindistrict.

Ofthetownsanalysed,ithadtheequalhighestunemploymentrate (8.3%), as well as a high proportion of individuals whowere labourers or related workers (refer to Section 10.5). Inthe 2006 census, the most common industries of employment were manufacturing, retail, and primary industries. There is one sawmilloperatinginMerbein,whichemploys25FTEstaffwholiveinMilduraandMerbein.MerbeinSawMillreliesontimberresources from NSW – with logs and residue sourced from StateForests,WesternLandsLeasesandprivateland.

On all of the economic indicators of vulnerability, Merbeinoutscored the regional average. In particular, Merbein had ahigh proportion of low-income households and a low level of homeownership.Furthermore,Merbeinexceededtheregionalaverage on a number of human variables, which included having low levels of education and high levels of unskilled workers. In light of Merbein’s high levels of economic andhuman vulnerabilities, it is likely to be sensitive to changes that impact upon employment (refer to Section 10.5).However,thisanalysiswasundertakenonthetownofMerbeinonlyanddidnotcapturetheextensiverangeofservicesandemploymentopportunitiesavailableinnearbyMildura.

TourismdataarenotavailableforthetownofMerbein.TourismResearchAustralia (2008f)estimates that, in total, theMilduraRegionalLGAreceivesatotalof465,000visitorswhospend$153 million.

AerialviewofBurongaandGolGol–NSWtownsalongtheMurrayRiveradjacenttoMildura

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