SUMMERS SAWMILL, NUNDLE

Mr PETER DRAPER (Tamworth) [6.00 p.m.]: Tonight I wish to alert the House to difficulties facing Summers Sawmill in Nundle that could result in the possible closure of the area's largest employer and also considerable negative flow-on effects for regional businesses. Summers Sawmill has a long and proud history in the town of Nundle. Started by the family in the 1960s, the sawmill is currently operated by its third generation of owners, brothers Brian and Denny Summers. Their wives Rosemary and Roslyn are also employed at the mill. Employing a further 13 local people, the mill contributes $9,000 in wages to Nundle families each week, and $2.5 million to the local economy annually from softwood pine product.

Unfortunately the Summers are now facing the possibility of closing the mill because Macquarie Generation has terminated an agreement to buy waste wood chips for use at the Bayswater Power Station at Muswellbrook. According to a letter sent by Macquarie Generation's Fuel Services manager, Ray Durie, "considerable operational problems" have been experienced with the processing of wood chips and this has "seriously impacted" on the production of electricity. As a result, the company will no longer take wood chips as of June 30, leaving Summers Sawmill without a suitable buyer for its waste.

With the mill producing up to 60 tonnes of waste a day, this poses a significant problem. The Environment Protection Authority stipulates that the mill cannot store green waste on the premises and cannot dispose of it through burning. Since receiving advice that the contract would be cancelled, the Summers have been desperately searching for a new buyer for its waste wood chips. So far they have had little success, and recently they turned to my office to seek assistance. The mill is already facing financial challenges from rising fuel costs, plus escalating WorkCover and insurance costs. It sends most of its product to Queensland, where it faces an influx of cheap New Zealand timber. The Summers have invested in mill technology to upgrade their business, and have previously received State Government assistance.

When the mill was built at the current site five years ago, the State Government contributed $50,000 to the operation. To the Summers dismay, this grant was then treated as income by the Federal Government and almost half was taken away in tax. In 2004 they installed a new chipping machine at a cost of $60,000, but they believe a further $200,000 upgrade may be needed to remain competitive in the softwood timber market should the waste disposal issue be resolved. The timber industry is important not only to Nundle but also to nearby communities, with significant plantations located at Nundle and Walcha. The industry in these areas directly employs 111 people—60 at the local sawmill, 26 contractors and 25 within Forests NSW. Indirectly, it was estimated in 2003 that 40 to 50 per cent of employment in the Walcha shire is based around the agriculture and forestry industries, with 30 to 40 per cent in the Nundle shire.

To lose a mill as large as Summers Sawmill would have a significant impact on business in these areas, particularly transport operators. Andrew Daboos of Stoney Creek Transport is a long-time contractor who transports wood chips for Summers. He said that he is facing the prospect of scaling back his business by one truck and driver as a result of Macquarie Generation's decision to abandon the use of wood chips. Knight's Transport in Armidale would see a significant portion of its business disappear should the sawmill close.

Mr Richard Torbay: Shame!

Mr PETER DRAPER: Company owner-operator Bill Knight said Summers Sawmill currently provides 30 per cent of his business, and a closure would force a serious review of his operations and staffing. I agree with the honourable member for Northern Tablelands, it would be a shame. Brian Hillier of Hillier's Transport in Armidale said that his business relies on work from Summers Sawmill to form part of its freight operations between Brisbane and Tamworth. Should the sawmill close, that operation would no longer be viable. The situation is startlingly similar for Betts Transport in Walcha, with owner Ken Murray saying the company transports three loads of timber a week to Summers Sawmill. He also relies on work from the mill to assist his Brisbane to Tamworth freight operations, and should the mill close the business would be forced to lay off one worker and reduce its operations by one truck. Brian Smith Timber Transport of Walcha and Hellyars Transport of Lismore also face significant losses.

There are few options for the Summers to explore, but I believe the first step would be to convince Macquarie Generation to continue taking the wood chips until Summers Sawmill can find a suitable buyer. I am told that Forests NSW is also assisting to find a buyer. I implore Ministers Macdonald, Debus and Tripodi, and also the Premier, to move urgently to secure the future of Summers Sawmill. This is critically important for a small community given that the potential loss of employment for 7 per cent of the town's population is the equivalent of 280,000 job losses in Sydney. I seek the Government's assistance to resolve this worrying situation as quickly as possible. I am extremely pleased that I have managed to secure a meeting with the Minister for Energy, the Hon. Joe Tripodi, to discuss the issue this week.

Private members' statements noted.

[Mr Acting-Speaker (Mr Lynch) left the chair at 6.04 p.m. The House resumed at 7.30 p.m.] 

Proof, NSW Legislative Assembly Hansard, 6 June 2006, Pages 57 - (article 41)