The restructure will involve the offer of voluntary redundancies to up to 75 FPC staff. The FPC will also be hosted by the Department of Agriculture and Food to save on accommodation and administrative costs.
The staff reductions will occur at metropolitan as well as regional locations. Most of the changes will occur across the next two years.
Mr Redman said the restructure is unfortunate but necessary because the mismanagement of the FPC by the previous Labor government left the organisation in a dire financial position.
“The previous government failed to provide appropriate guidance and parameters to the FPC,” he said.
“As a consequence the commission was allowed to become reliant on unsustainable borrowings and Federal Government grants that have since ended.
“That has meant that instead of returning a dividend to the Government, the commission has posted consecutive losses over the past two years.”
The Minister stressed the financial pressure was coming from the new plantations segment of the FPC business, not the native forest segment.
“The FPC’s native forest and mature plantation operations remain profitable. The problem is an imbalance between costs and revenue in the share farming and fee-for-service operations,” he said.
“In a program jointly funded by the Federal Government, the FPC spent $64million of taxpayer funds on strategic tree farming (STF) in lower rainfall areas. That funding has now ended.
“In order to meet STF planting targets, the State Government would need to invest something like $40million every year for the next 20 years, and that is clearly an unacceptable drain on taxpayer resources.”
Under the restructure, the FPC will stop investing in lower rainfall plantation development and focus on its core business of native hardwoods, mature pine plantations and sandalwood.
“Despite the changes, I can assure those who have contracts with FPC - be they customers, sharefarmers or service contractors - that contracts will be honoured,” Mr Redman said.
Mr Redman said the Government had allocated funds for voluntary redundancies for FPC staff.
“FPC staff will not be thrown out into the street,” he said.
“All effort will be made to redeploy staff to other government agencies and those who can’t be redeployed will be offered generous severance packages. Counselling services will also be made available to affected staff.”
“I acknowledge this has been an unsettling time for FPC staff, and there is still a way to go yet.
“However, I am firm in my resolve that these steps are necessary and I am confident this restructure will allow the FPC to continue to play an integral role in a viable and sustainable forestry industry in Western Australia.”
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