Thenative forest logging divisionof the New South Wales government’s forestry agency has posted a half-yearly loss of almost $15m, prompting renewed questions about the industry’s economic viability.
The half-year report for 2024-25, tabled in the state’s parliament last week, shows the hardwood forests division lost $14.9m, which is $9m more than the agency had projected – taking the division’s total losses since 2020 to $87m.
The Forestry Corporation of NSW said in its report that several factors had contributed to the half-yearly loss, including higher than expected land management costs, lower than forecast timber production due to adverse weather conditions, and regulatory changes such as theestablishment of “koala hubs”in the proposedgreat koala national park.
But critics in the conservation sector said the ongoing losses from the division raised questions for the government about its financial sustainability.
“It’s long past time premier Chris Minns and treasurer Daniel Mookhey stepped in to stem the losses and re-orientate the timber industry in NSW to a sustainable plantation based future,” said Justin Field from the Forest Alliance NSW.
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Field, a former independent member of the NSW upper house, called for more government scrutiny of the financial losses from the hardwood division, saying “the taxpayer deserves a rethink”.
“Why would they throw good money after bad only to see our native wildlife suffer? It makes no sense,” he said.
Forestry Corporation’s revenue from all of its operations for the first half of the 2024-25 financial year was $193.9m, according to the report.
The report said this was $15m below target “due to continuous disruptions in hardwood production, a decrease in commercial firewood demand resulting from milder weather, and ongoing suppression of market demand for softwood products”.
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A spokesperson for the Forestry Corporation of NSW said: “overall the balance sheet is in a net asset position of $1.6bn”.
“The claim that native timber forestry operations are loss making and subsidised demonstrates poor understanding of the information and financial accounting in the half-yearly report,” they said.
“Over the past four years, Forestry Corporation has returned more than $13m in dividends to the people of NSW, while providing community services including free public access, free camping and picnic areas, community roads, fire protection and pest and weed management.”
But the chief executive of the NatureConservationCouncil of NSW, Jacqui Mumford, said the ongoing losses from the hardwood division suggested “native forest logging in NSW clearly does not have a viable future”.
“It makes no sense that taxpayers are subsidising a loss-making business that destroys precious habitat when we should be supporting local communities and viable industries that do have a future.”
Mumford noted that the softwood plantations division of the forestry agency, which posted half yearly earnings of $14.4m, remained profitable.
A government spokesperson said the government was working to finalise the forestry industry action plan – a roadmap for the industry under development.
“We recognise that forestry is facing challenging times, from weather events to regulatory changes,” they said.
“That’s why we are working to get this action plan right – to align a sustainable timber industry with the government’s key environmental priorities.”