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Worth more standing: As NSW’s debt mounts, NCC calls for an end to subsidies for the logging industry.

22nd June 2023
Worth more standing: as NSW’s debt mounts, NCC calls for an end to subsidies for the logging industry. 

The Nature Conservation Council of New South Wales (NCC), the states leading environmental advocacy organisation, has today responded to the foreshadowed NSW budget deficit by arguing that it is unacceptable to continue subsidising the destruction of our native forests.

“The NSW Government has been covering the losses of the native forest logging industry for nearly a decade. It is not a profitable industry; in the past two years alone, $29 million of taxpayer money was spent subsidising the native forest logging division of Forestry Corporation NSW” Jacqui Mumford, CEO of the Nature Conservation Council of NSW said.  

“Ending native forest logging and focusing on the profitable plantation sector would save taxpayers, our precious forests, and  put Forestry Corproration on a path to sustainable operations.” 

“There are also significant financial opportunities for the government by transitioning out of public native forest logging. The industry generates 3.6 million tonnes of carbon annually in NSW, which has been valued at $2.7 billion worth of climate mitigation action by 2050."

“Public native forests create an economic gain from being protected, by generating carbon credits, tourism and recreation.

“The NSW Treasurer has to sign off on the Forestry Corporation NSW's Statment of Corporate Intent by the end of this month. A decision has to be made; does NSW want to allow the use of public money to prop up a dying industry that is bad for nature and bad for the climate?” 

“Despite the misinformation being spread by Forestry Corporation, this would have almost no impact on timber supply. Over 90% of native forest that is logged in NSW is pulped and sent overseas to be used in woodchips and cardboard” Mumford also said.  

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Background 
The native forests division of Forestry Corporation NSW (FCNSW) made a loss $20m of public funds in 2020-21 according to its annual reporti. In 2021-22, FCNSW's native forest division lost $9 millionii. 

While the Black Summer fires added pressure to FCNSW and the forests it logs, this continues a trend of many years of losses for this division. This does not include other grants and subsidies that FCNSW receive from Federal Government (including $9,787,851.1 in 2020-21 for bushfire recovery projectsiii) and the State Government (in 2022 the NSW government handed the industry $10 million of grants related to floodingiv).  

Frontier Economics and ANU found that ending native forest logging would result in a $60m net economic benefit to the state as well as a CO2 emissions saving of one million tonnes per annumv.  

A 2023 report highlighted that NSW generates 3.6 million tonnes of carbon from its native forestry operations in a year. Stopping this would be the equivalent of 840,000 cars being taken off the road and would see $2.7 billion worth of climate mitigation impacts between 2023 and 2050vi.  

The Blueprint Institute 2023 report, Branching Out: Exploring Alternate Land Use Options for the Native Forests of NSW , found in a cost-benefit analysis that ending native forest logging in the North East Regional Forestry Agreement area by 2023–24 instead of 2039-40...and instead utilising the land for carbon sequestration and tourism will deliver a net benefit valued at $45 million in present-day dollars. This includes the estimated cost of providing transitional packages to the industry as it shuts down, as well as the cost of breaking wood supply agreements that extend to 2028 vii. 

 

i $20m loss: native forest logging last year cost taxpayers $441 per hectare, Sydney Morning Herald 

15-3-22  

ii FCNSW Annual Report 21-22, P. 11 

iii https://ausfpa.com.au/wp-content/uploads/2020/12/40million-in-Federal-forest-recovery-funding.pdf, & https://www.edenmagnet.com.au/story/7549879/new-regional-forestry-hub-launched-in-eden-aims-to-support-growth-and-innovation/?cs=658 

iv https://www.abc.net.au/news/2022-05-24/nsw-gov-subsidy-waterlogged-north-coast-timber-industry/101093710 

v Frontier Economics, Comparing the Value of Alternative Uses of Native Forests in Southern NSW, 2021, p.27 

vi Rachel Williamson, Stopping native forest logging could deliver billions in climate benefit, study says, Renew Economy 
Available: https://reneweconomy.com.au/not-logging-native-forests-could-deliver-billions-in-climate-benefits-study-says/?fbclid=IwAR0NeMc_Dj2cy5138qck4DAwSP9XO4QSZZY7fjFRo3LY_mrIGzg8Yltnvn8 

 vii https://www.blueprintinstitute.org.au/branching_out_exploring_alternate_land_use_options_for_the_native_forests_of_nsw  

 

Statement ends 

Media contact: Clancy Barnard 

E: [email protected]  Ph: 0438 869 332 

Note: NCC CEO Jacqui Mumford is available for comment on request  

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