The Forestry Corporation’s loss of $32 million from its hardwood logging operations last year, coupled with their ongoing failure to honour wood supply agreements, shows that logging public native forests is an economic basket-case and not a viable business, according to NEFA spokesperson Dailan Pugh.
‘Over the past four years the Forestry Corporation lost $85 million from logging native hardwood forests and hardwood plantations, despite receiving tens of millions in taxpayer equity injections,’ said Mr Pugh.
‘On top of this, sawmillers received tens of millions in government payments for transport subsidies and for mill upgrades. Last year it cost $4,330 a hectare to log 7,390 ha of public native forests.
‘Taxpayers are paying an exorbitant cost to subsidise private sawmillers to log native forests.’
Yields crashing
‘Since the 2019/20 wildfires the Forestry Corporation’s yields from native forests in north-east NSW have crashed by 44 per cent, the timber is simply not there anymore, yet the Forestry Corporation remains in denial.
‘This is before the creation of the Great Koala National Park, and so cannot be blamed on it,’ said Mr Pugh.
‘With gross over-logging and timber yields crashing there are no prospects that logging of native forests will ever be economically viable.
‘Despite prematurely logging hardwood plantations, since the fires the Forestry Corporation have not been able to supply the volumes committed to sawmillers in legally enforceable Wood Supply Agreements, exposing taxpayers to millions more in compensation payments. While the Forestry Corporation’s Annual Report acknowledges this failure, it does not identify the volumes, or account for the accumulated debt from the past six years of shortfalls.
‘We not only have to pay to supply the timber to sawmillers, we also have to pay for the timber they don’t get. Logging public native forests is an economic basketcase, and with plantations now providing 91 per cent of our sawn timber, it is no longer needed. It will be of far greater economic benefit to the community to complete the transition to plantations and stop degrading public forests.
‘Stopping logging and restoring public native forests is worth immeasurably more for restoring habitat of threatened species (cheaper than expensive recovery actions), increasing water yields to streams and reservoirs, sequestering and storing CO2 out of harm’s way, and providing recreation opportunities and tourism revenue.
‘It is in the best interests of the community to stop logging public native forests,’ said Dailan Pugh.
A history of loss-making operations
Forestry Corporation’s annual report outlines a loss of $32 million for the 2024–25 financial year. This follows losses of 29 million dollars in 2023–24, 15 million dollars in 2022–23, 9 million dollars in 2021–22 and 20 million dollars in 2020–21.
‘Today’s release exposes the growing cost to taxpayers of a financially and ecologically unsustainable industry,’ said Clancy Barnard, Senior Forest Campaigner with the Nature Conservation Council.
‘Forestry Corporation has not recorded a profit from native forest logging in more than ten years – despite receiving over 246.9 million dollars in grants since 2019,’ he said, noting that Forestry Corp continues to spend more to log each tree than it earns from selling them.
‘Why is Forestry Corporation allowed to sell timber for less than the cost of cutting it down and transporting it? Why don’t they have to pay a fair resource rent to taxpayers for the destruction they cause to our public native forests?’
These financial losses come less than 24 hours after the Senate passed the rewritten Environment Protection and Biodiversity Conservation Act, removing the long-standing exemption that kept native forest logging outside federal nature laws.
When the new national environmental standards commence, logging operations will have to comply with federal threatened-species protections for the first time in 25 years.
Profitless destruction of vital ecosystems
Greens MP and spokesperson for the environment Sue Higginson said, ‘The logging of our precious native forests has not produced a single dollar of profit in NSW for almost a decade, and it likely never will. Yet somehow the destruction of these vital ecosystems has been allowed to continue.
‘It is time to call it for what it is – an industry of the past that must be stopped now,’ she said.
‘The Federal Labor government, along with the Australian Greens, have now essentially put the final nail in the native forest logging industry – with exemptions from federal environment laws for the logging industry coming to an end in 18 months.
‘I cannot see any native forest logging operation in NSW meeting even the weakest national environmental standards, because native forest logging is so destructive. It’s driving forest dependent species to extinction and it’s fueling the climate crisis through the massive amounts of carbon released through logging.’
Time to stop
‘For Premier Chris Minns and the NSW Labor government, this has to be it, now is the next best time to end public native forest logging, we can’t afford environmentally, economically or socially to let it continue,’ said Ms Higginson.
‘It is also the case that the Forestry Corporation is facing a litany of prosecutions for breaking the environmental protection logging rules, the whole gig has become completely untenable.
‘We know that our native forests are worth so much to us all when they are standing intact providing the essential service they provide, clean water, threatened species habitat, carbon draw down and storage, landscape stability, recreation, education and culture and the ever increasing pollination required for agriculture.
‘To have to pay to destroy our precious forests is incomprehensible and is political failure,’ she said.
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