Sawmill Voluntary Transition Package

• A copy of the current executed and dated Timber Sale Agreement with VicForests including any relevant Deeds of Amendment or a copy of the current executed and dated Forest Produce Licence administered by VicForests.
• A declaration that the business (the entity which is party to the relevant Timber Sale Agreement or Forest Produce Licence) is eligible to participate in the Package including that the business:
  • Currently produces sawn timber products as its main output noting this excludes posts, poles, and firewood.
  • Has a dedicated sawmilling site on private land.
  • Holds a current registered Australian Business Number (ABN).
  • Meets all industrial relations obligations as an employer in accordance with the Fair Work Act 2009 (Cth) National Employment Standards.
• A declaration that the business will comply with the conditions of participation in the Package set out in the Sawmill Voluntary Transition Package Guidelines.
• The date prior to 31 December that the business will cease buying and receiving logs from VicForests.

• Component 1 – Timber pricing
  • Acknowledgement of the timber price payment as outlined in the letter sent by the Department inviting an application for the Sawmill Voluntary Transition Package
• Component 2 – Plant and equipment compensation
  • A copy of the business’s asset depreciation schedule that is Australian Taxation Office compliant if a claim for non-fully depreciated plant and equipment is made
  • Identification of the plant and equipment for which compensation is requested
  • Agree to the Department arranging 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 non-fully depreciated plant and equipment for which compensation is requested.
• Component 3 – Sawmill site rehab
  • The number of sawmill sites for which the rehabilitation payment is requested
  • The address of each sawmill site
• Component 4 - Employee statutory redundancy costs
  • A 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.

    Note that the information in the spreadsheet may be de-identified and not include employee names.

The cost of individual packages will vary, depending on the details of their specific timber sale agreements.

The packages are broadly consistent with the Sawmill Opt-out Scheme.

No sawmill is required to participate in the scheme but the benefit is access to compensation for having to cease taking Victorian native timber before 1 January 2024.

The Department will pay the difference between the non-fully depreciated value (closing value) of the eligible plant and equipment and the auction realisable value based on a valuation undertaken by the Valuer-General Victoria.

To be eligible for the payment, plant and equipment must:

• be listed on the business’s ATO-compliant 2021-22 or 2022-23 depreciation schedule with a closing value of greater than $0.00
• be used primarily for the production of sawn timber
• not be a motor vehicle, IT and office equipment, and infrastructure. These will be considered as separate asset classes from the plant and equipment used for the processing of native forest timber and will not be included in the valuation
• not be deployed for sawmilling purposes by the business after payment has been made by the Department if the sawmill remains open
• The business may sell or donate the plant and equipment after a payment has been made.

If the valuation amount is less than the closing value on the depreciation schedule, the Department will pay the difference, up to $1.0 million per eligible business.

If the valuation amount is greater than the written down value for a piece of plant and equipment, the Department will not make a payment.

For example:

The valuation of plant and equipment can be undertaken in a day. The date of the valuation will be by agreement with the sawmill.

The Department will pay $150,000 towards sawmill site rehabilitation for sawmills that have an annual intake of 1,000m³ of sawlog or more and intend to cease operating as a sawmill by 30 June 2025.

For sawmills with an annual intake of less than 1,000m³ of sawlog and intend to cease operating as a sawmill by 30 June 2025 the Department will pay $50,000.

Sawmills that have more than one processing site at least one kilometre apart are eligible for additional sawmill site rehabilitation payments.

You do not need to close your mill to receive a Sawmill Voluntary Transition Package.

The Department will reimburse the sawmill for employee redundancy payments made by the sawmill, 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. Only actual redundancy amounts will be reimbursed.

Note that reimbursement of employee redundancy payments will be made on the basis of a genuine redundancy.

The Department will not reimburse the payment of leave entitlements.

If a business receives a package and intends to make some or all of their workforce redundant, the business will be required to do the following from the date an application is submitted:

• issue a written notification to employees regarding their redundancy and final employment date and provide an Employment Separation Certificate form to certify important employment information.
• provide employees with the opportunity to participate in an agreed program of pre-redundancy training, including onsite skills audit and/or verification and other Victorian Forestry Worker Support Program activities, with the cost of any leave to be at no cost to the employee or the State; and
• provide access for the Department’s worker support program staff to engage with employees regarding the Victorian Forestry Worker Support program, with the access to employees to be provided at no cost to the Department or employees.

Yes. Redundancies are a commercial business decision for the employer. Any worker who is made redundant because of the transition away from native timber harvesting can access the Worker Support Program.

All Victorian native timber workers are eligible for the Victorian Forestry Worker Support Program.

Workers can contact ForestWorks on 1800 177 001 to register and connect with a Worker Assistance Coordinator.

ForestWorks is the primary service provider for the Worker Support Program and support is available now including:

• Worker Support Payments.
• Top-up Payment.
• Relocation Payment.
• Worker Support Services.
• 1:1 case management.
• Recognition of prior learning.
• Funded Training.
• Employment support and job matching.
• Health and wellbeing support.
• Referrals to other support agencies.

Worker Support Program details

Worker Support Payments

• Workers may be eligible for a Top-up payment.
• Payment is capped at $120,000. (Genuine Redundancy plus Top-up payment)
• Four weeks of pay for every year of service in the native timber industry, including any statutory entitlements.
• Up to 152 hours of unused sick leave.
• Workers may also be eligible for a relocation payment of up to $45,000 if a worker needs to relocate for permanent alternative employment.

Funded training and access to Free TAFE

• Access to the Free TAFE program to help retrain workers to get jobs in growing regional industries such as construction, agriculture, transport, and manufacturing through TAFE Gippsland and other key TAFE campuses in timber communities.
• Recognition of prior learning and competencies to formalise skills acquired
• Tailored training plans
• Eligible workers can access up to $8,000 in funded training.

Health and wellbeing support

• Free mental health support is offered to native timber workers, business owners, contractors, and their family members.
• The Worker Support Program, facilitated by ForestWorks, is the main channel for assisting workers and their families, focusing on their health and wellbeing, including mental health support. It offers tailored responses to address the individual needs of each worker.

Payment will be made once:

• the Minister for Agriculture approves a package
• a Letter of Offer is made and accepted
• a Grant Agreement is signed
• Any unpaid moneys to VicForests is paid and a Deed of Termination and Release for Timber Sale Agreements entered into with VicForests.

Eligible Forest Produce Licence holders who operate a sawmill can apply for a package including:

• A payment for the contracted or licensed volume of sawlog that will not be supplied in 2023-24
• A payment of up to $1,000,000 per business for non-fully depreciated plant and equipment used to process native timber from Victorian State forests
• A payment of up to $150,000 for sawmill site rehabilitation
• A payment to cover employee statutory redundancy costs.

Sawmills with an annual intake of 1,000m³ of sawlog or less will be eligible for $50,000 for sawmill site rehabilitation.

This differs depending on the details of each sawmill’s Timber Sales Agreement. In most cases, these cease on 30 June 2024.

The Timber Sales Process will not proceed. Large-scale commercial native timber harvesting in State Forests will end before 1 January 2024. VicForests will not issue sales contracts for supply after 31 December 2023.