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Tasmanian Forest Contractors Exit Assistance Program

​​This program was funded for the 2010-2011 financial year and has now closed. Details of the program are set out below.

Due to the difficult financial circumstances being faced by many of Tasmania’s native forest harvest and haulage contracting businesses, the Australian Government committed $22.4 million to help Tasmanian contractors and their employees.

This commitment was delivered through two programs, the $17 million Tasmanian Forest Contractors Exit Assistance Program run by the Department of Agriculture, Fisheries and Forestry and the $5.4 million Tasmanian Forest Contractors Financial Support Program run by the Tasmanian Government.

Tasmanian Forest Contractors Financial Support Program

Details on the Tasmanian Forest Contractors Financial Support Program can be found on the Tasmanian Department of Infrastructure, Energy and resources web site.

Tasmanian Forest Contractors Exit Assistance Program

The Tasmanian Forest Contractors Exit Assistance Program aimed to reduce business overcapacity in the Tasmanian native forest harvest and haulage contracting sector. It sought to assist eligible businesses to exit the Tasmanian native forest harvest and haulage contracting sector. The Program provided up to $17 million for exit assistance to harvest and/or haulage contracting businesses.

Businesses applying for exit assistance were asked to nominate a figure to exit the industry based on their view of business viability including business related debt, reliability of future harvest and/or haulage volumes. Grants were capped at $750 000. As most of the funding was allocated in this initial funding round, there will be no further funding rounds.

Successful applicants

This was a competitive grants program and therefore suitability was determined by ranking applicants according to merit criteria outlined in the Grant Program Guidelines.

Program Guidelines

Program guidelines were released on 23 November 2010. The guidelines set out the eligibility criteria for the program. Signed application forms had to be received by 4pm on Monday 13 December 2010.

During this time eighty three applications were received.

Assessment of Applications

Applications were assessed by an Advisory Panel against the program’s objectives, eligibility criteria and exit assistance merit criteria.

The Advisory Panel made recommendation and the decision regarding grant funding was made by a Departmental Delegate, on behalf of the Minister for Agriculture, Fisheries and Forestry.

The Advisory Panel

The Advisory Panel comprised the following members:
Mr John Talbot — Chairperson and Australian Government representative
Mr Kim Creak — Tasmanian Government representative
Mr Rob de Fegely — Independent Member

Assessment Method

The Advisory Panel scrutinised applications against the eligibility and merit criteria. To be eligible to apply for exit assistance business had to:

  • have an Australian Business Number (ABN)
  • conduct its activities predominantly in the Tasmanian native forest harvest and/or Tasmanian native forest haulage contracting sector
  • have been operating as a harvest and/or haulage business for the period 1 January 2009 to 30 June 2010 and had a contract (operative or inoperative), quota or delivery arrangement
  • be able to show business related debt.

Merit Criteria

Eligible applications were then ranked against the following merit criteria:

Criterion 1. The amount nominated for business exit. Smaller amounts were ranked higher under this criterion due to the aim of the program to reduce the number of businesses in the sector.

Criterion 2. The percentage of the business’s Tasmanian harvest and/or haulage operations that were undertaken in the native forest sector for the period 1 January 2009 to 30 June 2010. An eligible business with all operations in the native forest sector will be ranked higher under this criterion than one with a smaller percentage of operations in the sector.

Criterion 3. The size of contracted/agreed volumes. Higher volumes were ranked higher under this criterion as it takes greater capacity out of the industry.

Criterion 4. Level of debt. This includes the amount of money owed in employee entitlements. Higher debt, including a higher level of entitlements owed, were ranked higher under this criterion.

Merit Criteria Weighting

The Advisory Panel gave the following weighting to the merit criteria:

Criterion 1 — 40 per cent

Criteria 2, 3 and 4 — 20 per cent each

Assessment of Applications

The Advisory Panel considered each of the applications individually, including the results of the simple mathematical ranking functions and the independent financial advice as well as their own knowledge of the industry and industry operations. The Advisory Panel also considered the reliability, validity and clarity of the documentary evidence that was provided to support the claims made in the applications.

The Advisory Panel confirmed eligibility or otherwise, developed a merit order of eligible applications and determined which applications would be recommended for funding.

To assist in determining the merit order, the Advisory Panel categorised the assessed applications into four groups:

  • Strong applications which met and provided well–substantiated documentary evidence for all of the merit criteria.
  • Good applications which met all of the merit criteria but which required further documentary evidence to allow the Advisory Panel to make a decision.
  • Borderline applications which did not provide enough information to allow the Panel to determine if the merit criteria had been adequately met.
  • Poor applications which, if funded, would not assist in meeting the program objectives.

The Advisory Panel worked on a consensus basis. The Advisory Panel reached a decision on the assessment and made recommendations to the Delegate.

Letters to successful applicants

Successful applicants were sent a letter of offer from the Department of Agriculture, Fisheries and Forestry on 22 December 2010.

Where the successful applicants had received funding under the Tasmanian Community Forest Agreement Industry Development Program they received a modified letter

Successful grantees will be published on the department's Grant Website within 7 working days of the grants being signed by the department.

Letter outlining hiring and leasing policy.

Funding Deed

Applicants awarded funding were required to sign a Funding Deed. The Funding Deed contained the terms and conditions of funding. Each grantee was required to nominate a representative who will be known as the nominated individual. The nominated individual is required to sign the funding deed and the deed of undertaking.

Deed of Undertaking

The deed of undertaking identifies —

“The Nominated Individual undertakes and pledges that he/she will not become an owner or run a Tasmanian native forest contracting harvest and/or haulage business within 5 years of the Grantee receiving the first Milestone funding payment under the Funding Deed.”

(Blank example) Deed of Undertaking PDF Icon PDF [59 KB] msword Word [122 KB]

Exit Assistance Payment Structure

The assistance in the Tasmanian Forest Contractors Exit Assistance Program will be made in two milestone payments.
The first milestone payment was 75 per cent of the total approved amount and was made on the signing of the Funding Deed and the Execution of a Deed of Undertaking.

The second milestone payment of 25 per cent will be paid on proof of payment of all employees’ entitlements and proof of sale or demonstration that the business machinery will not be used by the applicant in the Tasmanian native forest harvest and/or haulage contracting sector.

Letters were sent to grantees by the Department of Agriculture in March 2011. The letters outlined the process for receiving the second milestone payment.

Where the successful applicants had received funding under the Tasmanian Community Forest Agreement Industry Development Program (TCFA IDP) they received a modified letter. TCFA IDP applicants were also sent letters outlining their reporting requirements when listing machinery for sale.

Grantees are required to sign and return documentation to the program secretariat prior to receiving the second payment. The documentation consists of a Deed Poll to be signed by the nominated individual confirming that all employees have been paid their entitlements (according to annexure 1 and annexure 2) and that the business machinery will not be used by the grantee in the Tasmanian native forest harvest and haulage contracting sector (according to annexure 3).

Monitoring and Compliance Program

Tasmanian Community Forest Agreement Industry Development Program

All successful applicants under the Tasmanian Forest Contractors Exit Assistance Program that have previously been awarded funding under the Tasmanian Community Forest Agreement Industry Development Program (TCFA IDP) are, prior to the sale or disposal of any TCFA IDP funded assets required to contact the Department of Agriculture to discuss whether a proportion of the proceeds of the sale or disposal are required to be returned to the Commonwealth.

Letters to unsuccessful applicants

All unsuccessful applicants were sent a letter from the Department of Agriculture, Fisheries and Forestry on 22 December 2010 informing them of the outcome of the assessment.

Letters to ineligible applicants

A number of applications were considered by the Advisory Panel to be ineligible in accordance with the program guidelines. All ineligible applicants were sent a letter from the Department of Agriculture, Fisheries and Forestry on 22 December 2010 informing them of the outcome of the assessment.

Review Process

As set out in program guidelines under the section on a complaints handling process, applicants for the program can contact the department if they have concerns with funding decisions. A review process which will involve review by an independent staff member, one who has had no role in setting up or implementing the program.

Allegations of Fraud

If a member of the public has reason to believe that the department has been provided with false or misleading information in relation to a grant application, relevant information should be passed to the department’s Fraud, Investigations and Security Team. The department’s Fraud, Investigations and Security Team operate independently to the Advisory Panel. The Team can be contacted initially via email Fraud or by calling 02 6272 4477. On receipt of information the Fraud, Investigations and Security Team will assess the information provided, and where appropriate further investigative action may be taken.

Updates on allegations of fraud

A number of allegations in relation to some applications were lodged with the department’s Fraud & Investigations unit in January 2011. The fraud unit has completed its investigation into the allegations received. The department’s Fraud & Investigations unit will investigate any new information or allegations. It is not appropriate to comment on specific cases, however to date no matters have been referred to the AFP for investigation.

Contact us

All correspondence concerning the TFCEAP (other than fraud issues) must come through the Secretariat.

The Fund Secretariat can be contacted for further information by Email, or:

Post:

Program Manager
Tasmanian Forest Contractors Assistance Program
Forestry Branch
Climate Change Division
Australian Government Department of Agriculture
GPO Box 858
Canberra ACT 2601

Phone: 02 6272 3972 during business hours

The TFCEAP is administered by the Australian Government Department of Agriculture.