SUPPORT SER"CES OFFICE HON ROB KERIN MP 1 1 OCT 2006 Member for Frome w)USE OF ASSEMBLY TRAVEL REPORT South East 2 July - 6 July 2006 Purpose of Visit The purpose of the visit was to attend a Parliamentary Party Seminar for three days in the Coonawarra, and to meet with a range of industry and Community leaders regarding issues in the area. Parliamentary Seminar This was an opportunity to plan ahead for parliamentary business, policy formation and to discuss a broad range of current and policy issues . Industry Overview The Region is a major contributor to South Australia's economy . It is a resource rich area, where climate, rainfall, ground water and a range of soil types create the opportunity for diverse agricultural and value added opportunities. Forestry, grapes, dairy, horticultural, broad acre crops and livestock are the major primary industries in the area . Consequently, important value adding industries are timber, timber and pulp products, wine production, meat processing, potato processing and others . There are two major issues of major concern to the industries in the region . They are all concerned at the deterioration of the road network and that traffic is.-predicted to increase dramatically as the regions blue gums reach harvest age . The other issue is the allocation, sustainability and management of the ground water resource . ; Other issues raised broadly are the shortage of both skilled and'seasonal labour, energy requirements, access to markets, general infrastructure and keeping young people in the area . Specific industries raised issues more relevant to them as well. The Coonawarra wine industry are entering a very difficult period . They are suffering along with the rest of the Australian industry from the current oversupply situation . Many of the local winemakers are spending very extended periods of time away trying to market their product. This has not previously been necessary. Along with the oversupply, the rationalisation of Australian wine distribution has acted to force the locals to market to alternative domestic and overseas outlets to retain any profitability. There are expectations that the current wine glut will cause major problems for the local industry over the next 3-4 years . HON ROB KERIN MP There are some who favour the removal of some of the vines, others oppose such a measure . There are also fears that the tight situation could lead to further local rationalisation, given the pressure on the smaller operators. Growers also raised the ongoing issue of groundwater. The aquifer system in the area is complex and drawdown problems worse in some areas than others. There is ongoing conflict as to the impact of large blue gum plantations on the aquifer, and how this impacted should be accounted for and managed . They are also very concerned at the regions inadequate road network. The state of the roads and lack of new road infrastructure, particularly around Penola and through Coonawarra were raised . Particularly on the main road through the Coonawarra there is an issue of grape harvesting equipment having to use the road . The road is quite narrow, and has a large and growing volume of tourist traffic. There are legitimate concerns, given the traffic, the need to move machinery, and the 100 kph speed limit, that accidents are inevitable . There are also many entrances to wineries and accommodation adding to this problem . Kimberley Clark(KCA) are a major employer and economic driver for the region . Their Millicent Mill and Tantanoola Pulp Mill are located adjacent to each other south of Millicent. KCA have recently completed a large investment in new infrastructure and technology which add certainty to their future operations in the region . They are a major consumer of timber and timber waste, and also a major user of both water and energy. Their new development was secured in 2001, and the technology on the site is world's best and it is hoped will keep the site competitive for years to come. A major product is Tantanoola fluff pulp, which is chlorine free and ideal for diapers and hygiene products . The uniformity of product produced is a major advantage for the site . The company provided a briefing on a whole range of issues. The future competitiveness of the site is influenced by many factors outside of their control .,Asian manufacturing, retail consolidation domestically and overseas, energy costs, transport costs, labour availability and cost are but some . Given the relative remoteness of Millicent from Capital cities, qualified professionals and tradespeople are an ongoing challenge . The lack of quality available housing aggravates this problem. The company has for quite some years been implementing an environmental improvement programme. There has been very significant investment by the company, and progress on remediating historical damage continues. Water, energy and timber supplies, and the cost of these inputs are ongoing issues vital to the sites long term survival . The site is close to the Lake Bonney Wind Farm, and whilst in reality some of that energy is used, the actual contracts for purchase of the energy from the grid are held in New South Wales. HON ROB KERIN MP Again, KCA are concerned about the road network of the region . As a major freighter of product to and from the area this is of great concern . The imminent huge increase in freight due to blue gums being harvested is of much concern. Having previously met with the proponents of the "Penola Pulp Mill" it was opportune to be updated on the progress of the project . The location and some other detail had changed since my previous briefing. The proposed mill is to be constructed 8 kilometres south of Penola. This offers the opportunity for considerable value adding and employment to occur from the regions blue gum plantations . I was updated on the consultation process being used by the company. The company obviously have a range of development, planning, infrastructure, energy, water, labour and environmental issues . Many of those are changing constantly and I will not go into those in this report . However, some issues are less dynamic and will definitely be ongoing issues when the development is operating . The issue of roads is a huge issue. In this case it includes both the major road network to access Portland, and the more complex issue of feeder roads to bring product from the scattered plantations . Skilled and unskilled labour is an issue, again complicated by the lack of suitable housing stock in the vicinity of the development . Water will always be an issue with these developments. The proponents are confident that they have secured sufficient water to ensure the long term viability of the plant. The development has been able to attract a strong and varied group of partners to invest in the project. Other industry people in the area raised a range of concerns, most of which reflected those raised above . SUMMARY This region has been and will no doubt remain a strong contributor to the S.A. economy. They are distant from Adelaide and often feel they receive consideration from Government at a much lower level than reflecting their contribution . There is no doubt that the huge issue for the area is the road network. This impacts on everyone. There is a real fear that as the blue gums reach harvest age the network just will not cope. The impacts will reach beyond the obvious economic impact. It is feared the roads will become increasingly, and dangerously unsafe due to the huge increase in large trucks. HON ROB KERIN MP This will impact on the safety of all road users. Not only will local residents be increasingly at risk, but the tourism industry of the area will suffer badly. Housing and labour shortages continue to be issues . These two are partly linked, and all levels of government need to work together to ensure the region does not lose development due to lack of workforce. Groundwater will continue to be an issue as there are competing users of a finite resource . Access to Government Services, tourism marketing, education and training services, health services nad aged care are other issues raised . The region has great potential, and this can only be acheived by all levels of government working with local communities and industry to help this region reach it's rich potential .