Review of policies and investment models to support continued plantation investment in Australia
Is it going to be profitable and how long will it take to get a return?’ are key questions investors in Australian timber plantations are bound to ask. Despite the strong demand for sawn timber and a strong commercial market for established plantations in Australia, no new significant areas of long rotation sawlog plantations have been established since the early 1990s. Compared with many other investment choices, new plantations have high establishment costs and a long waiting period for a return; it all results in a low rate of return on investment.
This review looks at strategies and investment models in Australia and overseas that have resulted in significant commercial plantation development and attracted a competitive processing industry. Polices and investment models were reviewed from two perspectives: firstly, policy in terms of strategies for continued plantation investment; and secondly, the investment models or mechanisms used to attract investment.
Future plantation funding mechanisms could include the current managed investment scheme taxation arrangements but with tighter controls; Government and/or investment institutions provide direct up-front grants to accredited plantation providers; or comparative tax deductions or rebates could also be considered.