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Forestry Industry

Published on: November 2022

Record: HANSARD-1323879322-129295

Forestry Industry

Ms FELICITY WILSON (North Shore) (17:55:28):

On behalf of constituents in my electorate I share their deep concerns for our native forests and wildlife. I record my support and my community's support for a plan to transition the native forestry industry towards sustainable plantations and to assist forestry workers and associated communities. It is clear that native forestry logging has become more sustainable over recent decades, but the environmental burden remains. The industry is increasingly financially unsustainable, and the Black Summer bushfires accelerated that challenge. Data from Forestry Corporation and the EPA shows that total hardwood timber production has fallen from just under 1.4 million cubic metres in 2009-10 to 0.6 million cubic metres in 2020‑21 following the bushfires.

Members have spoken in this place on a number of occasions about the impacts of the Black Summer bushfires. Over five million hectares of land were burnt, including two million hectares, or 40 per cent, of the national park estate and 875,000 hectares, or 40 per cent, of State forests. The disaster killed over one billion animals and hundreds of billions of insects. More species continue to be added to the already long threatened species list, including the koala and the greater glider. Peoples' lives were lost and peoples' lives and livelihoods continue to be affected, including by the downturn in the available supply of public native forest hardwood. The supply from the South Coast subregion was affected by up to 90 per cent. The Independent Pricing and Regulatory Tribunal [IPART] reported as recently as 2021 that the hardwood business is not recovering its harvesting and haulage costs.

Forestry Corporation is unable to pay a dividend for the next three years and the New South Wales Government has funded over $67 million in assistance, much of which has gone to the hardwood business. The industry is heavily subsidised by taxpayers. The industry faces tough challenges to its financial viability. Couple that with its environmental impacts and the benefits of alternative positive employment in other industries and the decision to transition out of native forestry becomes a clearer and more obvious reality. The Natural Resources Commission reported that the wood supply challenges are undermining the viability of a number of hardwood mills, including in Nowra and Narooma. While we can reflect upon those environmental impacts and cyclical challenges to the industry, it is clear the true challenges that face the New South Wales hardwood industry are fundamentally structural, and that is happening across Australia and around the globe.

Victoria and Western Australia have already committed to transitioning out of native forestry and a range of agreements are in place in south-east Queensland to do the same. Historically, Tasmania is the least diversified State and it is most reliant on timber, but it has been on a variegated journey. Affected communities and industries in New South Wales deserve support. We can provide them with ongoing economic benefit by transitioning out of native forestry and into plantations. We have seen significant boosts in other areas that have commenced such a transition by developing ecotourism, creating new jobs in recreation forest and fire management and by establishing carbon and biodiversity credit management. Recently Frontier Economics, in work undertaken on behalf of the WWF, advised that a transition package for New South Wales focused on structural adjustment support could help harvesters, haulers and mills—and their employees—and could include economic diversification packages for local regions that are impacted.

Frontier Economics estimates the package at about $300 million but also notes a number of positive budgetary offsets. They include avoiding future equity injections to Forestry Corporation and avoiding the loss‑making activities identified by IPART. Separate from that is the opportunity to support the establishment of plantations, which should be undertaken on a commercial basis, and the Government can play a role in that. The transition could commence as soon as 2028-29, when the majority of current wood supply agreements expire. The Government is proud of its range of commitments to the environment. They include the net zero commitment and the 50 per cent reduction in emissions by 2030, doubling our koala population by 2050—I note the member for Port Macquarie is an advocate for the protection of koalas—growing nature-based tourism, expanding and enhancing the contribution of natural capital and increasing the use of low-carbon housing construction materials.

State of the Environment 2021

Those commitments align with and would benefit from a transition away from native forestry. The Government's report identified habitat destruction and native vegetation clearing as the biggest threats to biodiversity. There is so much to gain from our native forests. They store carbon, are bushfire resilient, create a range of new industries and employment opportunities and reduce greenhouse gas emissions. New South Wales can deliver that outcome for our community's future.