Overview
In May 2023 the Victorian Government announced the cessation of commercial native timber harvesting in State forests by 1 January 2024.
The government has opened applications for the Harvest and Haulage Support Package to support Harvest and Haulage contractors to transfer to DEECA Forest and Fire Management Services Agreements or exit the industry.
Only harvest contracts will be able to be transferred. Compensation is available for businesses who have haulage contracts.
Contractors can access different components of the package depending on whether they choose to transfer their contracts or exit.
What is in the package?
The Harvest and Haulage Support Package is a payment the Victorian Government will make to harvest and haulage contractors with VicForests contracts.
The package includes:
- compensation for loss of income
- plant and equipment compensation
- a payment to reimburse employee statutory redundancy payments.
Contractors can access different components of the package depending on their circumstances.
Any workers that are made redundant as a result of a business taking a package are eligible for the Forestry Worker Support Program delivered by ForestWorks.
Who is eligible?
To be eligible to apply for the Package, an applicant business must:
- be a harvest and/or haulage business holding a contract with VicForests to harvest or haul logs in 2023–24
All businesses must:
- hold a current registered Australian Business Number (ABN), and
- provide a statutory declaration that they will meet all industrial relations obligations as an employer in accordance with the National Employment Standards under the Fair Work Act 2009 (Cth) and the applicable Award, such as the Timber Industry Award.
Types of Harvest and/or Haulage Agreements included
- Harvest and Haulage Agreement, and/or
- Harvest Agreement, and/or
- Haulage Agreement, and/or
- Linked Harvest Agreement, and/or
- Linked Haulage Agreement.
Exit pathways
Harvest and haulage contractors have 3 pathways available to them.
The Department will compensate the business for loss of income based on the business’ contract with VicForests for harvest and/or haulage services in 2023–24.
Haulage contracts
For haulage contracts and the haulage component of harvest and haulage contracts, DEECA will pay 100% of the contracted rate for 100% of the minimum 2023–24 contracted volume, pro-rated from the date agreed between the business and DEECA for the relevant contract to be terminated.
For example:
| Contract termination date | 100% of volume | 100% of rate | % of year remaining after contract termination date | Total amount payable by DEECA |
|---|
| 31/12/2023 |
20,000m3 |
$40.00/m3 |
50.0%
| $400,000
|
| 31/1/2024 |
30,000m3 |
$35.00m3 |
41.7%
|
$437,500
|
For harvest contracts and the harvest component of harvest and haulage contracts, DEECA will pay 30% of the contracted rate for 100% of the minimum 2023-24 contracted volume, pro-rated from the date agreed between the business and DEECA for the relevant contract to be terminated.
For example:
| Contract termination date | 100% of volume | 100% of rate | 30% of rate | % of year remaining after contract termination date | Total amount payable by DEECA |
|---|
| 31/12/2023 | 20,000m3 |
$40.00/m3 |
$12.00/m3 | 50.0%
| $120,000
|
| 31/1/2024 |
30,000m3 |
$35.00m3 |
$10.50/m3 |
41.7%
|
$131,250
|
Recipients of the loss of income compensation component of the Package are not required to close their business but are not eligible to transfer their VicForests contract to DEECA. Recipients may however remain eligible to participate in future DEECA panel opportunities.
Recipients of the loss of income compensation component of the Package are also required to surrender their harvest and/or haulage contract with VicForests.
The Department will compensate the business on the loss of value of plant and equipment used to harvest and/or haul timber up to a cap of $1.0 million
The Department will engage the Valuer-General Victoria to assess each eligible piece of plant and equipment under two scenarios:
- 2020 assumed market sentiment – that is, the assessed value of the asset based on its current condition (wear and tear) and assuming the market conditions if the decision to cease timber harvesting by 1 January 2024 had not been made (i.e, assuming a 2030 industry closure)
- 2023 market – that is, the value of the asset in today’s market.
The Department will pay up to the difference between the ‘2020 assumed market sentiment’ value of a piece of plant and equipment and today’s auction realisable value.
For example:
| | Current value assuming 2020 market sentiment | Current value in 2023 market | Projected loss on sale | Departmental payment |
|---|
|
Item 1
|
$250,000
|
$20,000
|
$230,000
|
$230,000
|
|
Item 2
|
$100,000
|
$80,000
|
$20,000
|
$20,000
|
|
Item 3
|
$650,000
|
$100,000
|
$550,000
|
$550,000
|
To be eligible for the payment, plant and equipment must:
- be listed on the business’s current ATO-compliant asset register; and
- have been used directly in the harvesting or haulage of timber from VicForests operations; and
- have a current replacement cost of $20,000 or greater
- not be a motor vehicle, IT and office equipment, or infrastructure.
A business can choose to sell or retain their equipment once the compensation is paid.
Reimbursement amount
The Department will reimburse the business for employee statutory redundancy payments made by the business, capped at the maximum rate specified in the applicable Award or National Employment Standards.
The reimbursement amount will be based on the evidence of the redundancy payment being made to an employee and the redundancy is a genuine redundancy.
A genuine redundancy means:
- A worker’s position that is not required by the employer, in this case due to the consequence of the transition away from harvesting native timber from state forests and the dismissal is because of the redundancy of the position (and not for any other reason).
- There must be no arrangements (such as promise of another job) or other circumstances which indicate the redundancy is not genuine.
Some workers may be categorised as ‘dual capacity’ employees, in that they are engaged by an employing entity, and are also a decision maker or officeholder of that entity. The department will seek to understand the nature of the termination in these circumstances to determine if there is a genuine redundancy.
For harvest only and harvest and haulage contractors novating their harvest contracts to DEECA, reimbursement to the business in respect of employee redundancy payments will only be provided if:
- the employee has ended their employment by reason of redundancy and received a redundancy payment from the business; and
- the employee has not been and will not be re-engaged or re-employed by the business for DEECA's Forest and Fire Management works within twelve months of the date of application for the Harvest and Haulage Support Package.
Only actual redundancy amounts will be reimbursed. The Department will not reimburse the payment of leave entitlements.
How to apply
The application can be made through an online form.
Apply now
Resume Application
- A copy of the current executed and dated Harvest and/or Haulage Agreement, including any relevant Deeds of Amendment.
- A current registered Australian Business Number (ABN).
- A statutory declaration stating that they will meet all industrial relations obligations as an employer in accordance with the National Employment Standards under the Fair Work Act 2009 (Cth), if they are an employing business.
- Confirmation of Package components being applied for:
- Component 2 – Plant and equipment compensation
- A copy of the business's most recent asset register that is Australian Taxation Office compliant.
- Identification of the plant and equipment for which compensation is requested.
- Agreement to allow the Department to arrange for a valuer from the Valuer-General Victoria to visit the site, accompanied by a Departmental officer, to undertake an independent valuation of all the eligible plant and equipment for which compensation is requested.
- Component 3 – Employee statutory redundancy costs
- A deidentified spreadsheet detailing the employee statutory redundancy payments to be made to employees who are to be made redundant:
- Employee starting date
- Years of service
- Hourly rate
- Award
- Redundancy pay weeks
- Redundancy pay value
- A declaration that the business will comply with the conditions of participation in the Package.
Key dates
Grants open: 1 December 2023
Loss of income compensation applications close: 31 March 2024
Plant and equipment compensation and statutory redundancy reimbursement applications close: 31 July 2024
For Contractors that don’t enter into a Forest and Fire Management Services Agreement, a Harvest and Haulage Support Package is available.
Contractors can apply for the Harvest and Haulage Support Package if they:
- do not want to take up a Forest and Fire Management Services Agreement
- are unsuccessful in entering into a Forest and Fire Management Services Agreement
- are ineligible for a Forest and Fire Management Services Agreement, such as haulage-only contractors.
The package includes:
- compensation for loss of income
- plant and equipment compensation
- a payment to reimburse statutory redundancy payments made by the business
The level of compensation will depend on your contract type, the value of your equipment and if you have made any employee statutory redundancy payments.
Businesses that apply to transfer their VicForests contract to a Forest and Fire Management Services Agreement but do not complete the process will be eligible to apply for compensation through the Harvest and Haulage Support Package.
Applications for loss of income must be made by 31 March 2024.
Applications for plant and equipment compensation and statutory redundancy reimbursement must be made by 31 July 2024.
Contractors who enter into a Forest and Fire Management Services Agreement can apply for the following Harvest and Haulage Support Package components:
Compensation for loss of income for any remaining harvest and/or haulage contracts – this applies to contractors with more than one harvest contract with VicForests and the haulage component of a harvest and haulage contract.
Plant and equipment compensation for plant and equipment not required for forest and fire management works.
A payment to reimburse statutory redundancy payments for any employees not required for forest and fire management works.
The level of compensation will depend on your contract type, the value of your equipment and if you have made any employee redundancy payments.
Businesses can apply for compensation for loss of income for and contracts not being transferred (i.e. haulage contract) by 31 March 2024 and for plant and equipment compensation and reimbursement for any statutory redundancy payments by 31 July 2024.
Yes, you can access the package for all your contracts.
Page last updated: 23/02/24
