The government has rejected Greens’ assertions that Launceston based Majestic Timbers has collapsed with employees losing their jobs and contractors owed money.
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In state parliament on Thursday Greens leader Cassy O’Connor asked Resources Minister Guy Barnett if he could confirm contractors had not been paid for up to three months and “its employees have been told they are out of a job tomorrow.”
“Will you explain to the house what has happened to this company your Government awarded a multi-million dollar, 180 000 tonne per annum export contract to, and will you take some responsibility for the terrible situation faced by contractors and workers because of your failure to ensure proper due diligence was done in awarding this contract? Ms O’Connor asked.
Mr Barnett accused Ms O’Connor of trying to “kill off the native forest industry and put out of work thousands of jobs across the state.”
He said following the closure of the Swire shipping service from Macquarie wharf, Majestic Timbers had advised Sustainable Timber Tasmania that it had temporarily suspended containerised export operations in southern Tasmania.
“In recent months Majestic Timbers had been taking up to 2000 tonnes of wood residues per month from southern forest operations for export in containers to South-East Asian markets,” Mr Barnett said.
“Majestic has advised that South-East Asian customer demand for export quality logs remains buoyant and the company is continuing to examine alternative arrangements for containerised exports from the south.
“We have been advised that Majestic's operations will continue.
“They will be meeting with suppliers and contractors affected by the decision to suspend containerised exports.”
Outside parliament Ms O’Connor said her information was that workers in the yard had been told their jobs finished on Friday.
“It’s extremely disappointing to ask this question in Parliament, and have Minister Barnett pretend everything with Majestic Timbers is peachy,” she said.
“It’s disrespectful to the contractors and workers - it’s not their fault but the fault of the government that didn’t do due diligence.”
When Fairfax Media tried to call the Invermay office the company’s phone had been disconnected.
Majestic Timbers registered with the ASX and signed a contract with Forestry Tasmania two months later, after the state-owned company endured a lengthy expressions of interest process to find a buyer for its southern-based wood residue.
Ms O’Connor said the company could claim $9 million a year off the freight equalisation scheme, further supported by the state-owned timber company pricing the product for less than it cost to produce.
"There is no doubt that without being able to get $700 in public subsidy per tonne for their product, Majestic Timbers would not have a business case," she said.
"If Majestic Timbers exports its full 180,000 tonnes, the public subsidies come in the order of $9 million.”
The workers’ union has been contacted for comment.