MEDIA RELEASE 17 December 2024

The pressure is growing on the NSW Government to stop logging of public native forests since the Independent Pricing and Regulatory Tribunal (IPART) identified that part of the problem is that the Forestry Corporation is not even covering the costs of cutting down the trees and delivering them to mills, leading IPART to highlight the growing costs to taxpayers when compared to alternative uses for native forests such as for tourism and carbon sequestration, and urging the Government to review the long-term feasibility of native timber harvesting.

“The Government needs to heed the advice of IPART that there are concerns about native forestry in NSW due to impacts on the environment and threatened species, climate change impacts and its economic viability, making it essential they review the long-term feasibility of native timber harvesting” NEFA spokesperson Dailan Pugh said.

IPART state “In addition to timber products, native forests provide habitat for wildlife including threatened species. Additionally, they provide water, environmental benefits, and opportunities for recreational and tourism activities. Forests also store carbon which help to reduce carbon dioxide in the atmosphere to mitigate climate change”.

“Over the three years from 2019-22 IPART identified FCNSW received $4.67 less per gross metric tonne (gmt) from the sawmills than it paid to harvesting and haulage contractors and in contract and administration expenses.

As noted by IPART ‘This means that FCNSW is selling native timber to sawmills for a delivery charge which is below the cost of harvesting and hauling that timber alone’.

“This does not include the Forestry Corporation’s other costs which resulted in a loss of $28 million over 2019-22, giving averaged overall losses from the hardwood division $16.7 per tonne” Mr. Pugh added.

“The situation is rapidly deteriorating as last year alone the Forestry Corporation lost $29 million on its hardwood operations.

“Unaccounted costs include the environmental costs such as the loss of threatened species, increased weeds, increased erosion, increased fire intensity, reduced water yields and loss of stored carbon.

“There is also no resource rent paid to taxpayers, meaning that the public gets no return from the use of their resources, rather we are paying the mills to take our trees.

“As recognized by IPART, rather than paying to log public forests, they can provide positive economic returns to taxpayers from tourism and carbon sequestration.

IPART conclude “Managing the native forests sustainability amidst environmental concerns and a declining industry, to ensure positive economic, environmental and social outcomes is therefore essential”.

The NSW Government now has the opportunity to do this, IPART “recommend that the NSW Government reviews the long-term feasibility of native timber harvesting in its NSW Forestry Industry Action Plan”.

“We hope the NSW Government heeds IPART’s advice and takes this opportunity to stop paying to degrade public native forests and instead profit from them being managed for wildlife habitat, recreation, tourism, water and their essential service of carbon capture and storage” Mr. Pugh said.

IPART’s report was released under freedom of information laws to the ABC, and has been obtained by NEFA.  IPART state:

In addition to supply constraints, there have been concerns about native forestry in NSW due to impacts on the environment and threatened species, climate change impacts and questions about whether it is economically viable. From 1 January 2024, Victoria and Western Australia have now ended native forestry. In addition to timber products, native forests provide habitat for wildlife including threatened species. Additionally, they provide water, environmental benefits, and opportunities for recreational and tourism activities. Forests also store carbon which help to reduce carbon dioxide in the atmosphere to mitigate climate change

Several recent studies have raised concerns about native timber forestry going forward, including ending native timber forestry in NSW. Some studies have argued that this could deliver net economic benefits given the historical financial performance of FCNSW’s hardwood division and the growing costs to taxpayers when compared to alternative uses for native forests such as for tourism and carbon sequestration.48 Such net benefits have been estimated to be $45 to $60m.49 NSW Natural Resources Commission has also found that NSW forests are showing signs of stress and degradation and that forests face a challenging future under climate change. Another study, looking at the relationship between climate and native forests, found that native forest logging increases the severity at which forests burn.50 This raises concerns about the continued impacts on native forests and on the state’s resilience to climate change.

Furthermore, protection of endangered species from extinction such as koalas and greater gliders, is a growing concern…