Two new reports have exposed significant financial losses in New South Wales' native forest logging industry, raising questions about its economic viability. The NSW Independent Pricing and Review Tribunal (Ipart) found that the state's forestry corporation has consistently lost money by paying contractors more for harvesting and haulage than it recovers from timber sales, a trend spanning at least a decade.
The Forestry Corporation of NSW's 2023-24 annual report revealed a $29 million loss for its native hardwood division, with total losses reaching $72 million since 2020-21. The corporation attributed poor returns to operational challenges, extreme weather, regulatory changes protecting koalas and greater gliders, and legal actions by community groups.
Economist Graham Phelan of Frontier Economics said the Ipart report was a timely contribution to forestry reform debates, noting that public native forestry offers 'poor returns to taxpayers at best'. He highlighted benefits of leaving forests standing, such as carbon sequestration and tourism, citing a Victorian government report valuing these at up to $12 billion compared to $89 million from harvesting.
Justin Field from Forest Alliance NSW called native forestry a 'bad deal for taxpayers', expressing astonishment that taxpayers are 'literally paying' to cut down forests sustaining koalas and providing clean drinking water. He urged the government to end native logging and shift to alternative industries.
Despite these findings, a Forestry Corporation spokesperson defended the practice, stating that timber revenue subsidises management activities like firefighting and conservation. The corporation plans to implement Ipart's recommendations on pricing and cost management.
