Change in basis for calculation of timber royalties

19/12/93

Sawlog royalties would be linked more closely to market prices for sawn timber Environment Minister Kevin Minson said today.

Mr Minson said Cabinet had agreed to change the basis on which hardwood and softwood royalties were calculated after a general review of timber royalties and other changes.

He said the new system would result in automatic increases in log prices as the retail price of timber rose.

"Essentially, the hardwood royalties will be brought into line with market-based indexes similar to the pine sawlog agreement with Westpine Pty Ltd," Mr Minson said.

"The system enables the royalties to be aligned more closely to the timber market rather than periodic reviews based on movements in the Consumer Price Index and increases in direct costs."

Mr Minson said Cabinet had also agreed to an 8.9 per cent rise in hardwood sawlog and chip log royalties.

He said softwood sawlog royalties would rise 15.2 per cent, reflecting increases in market prices since the last rise in 1990.

Royalties on other hardwood and softwood log products would rise 1.9 per cent.

The rise was the first for three years because of the recession although Westpine's royalties were increased seven per cent last July in line with its contract.

A new dry firewood royalty of $6.20 a tonne had been set to encourage firewood suppliers to take more green timber and dry it.

It would result in greater use of timber which was previously regarded as waste.

"The review of royalties has been underway for some time," Mr Minson said.

"The big increase in world prices for timber, especially softwood, can now be built into royalties so Western Australia will receive higher prices for timber from native forests and plantations."

Media contact:  Diana Callander 321 2222 or 222 9595