Furphy: Logging is a good economic use of native forests.

Fact: Native forest logging is uneconomic. Forest conservation is a more economically viable alternative.

Over the four years to June 2024, Forestry Corporation of NSW (FCNSW) lost over $70 million from its hardwood forests division, which includes native forest logging. Losses were $29 million in financial year 2024 (FY24), $15 million in FY23, $8 million in FY22 and $20 million in FY21 (FCNSW 2024 pp.30). Losses were a further $14.9 million for July to December 2024 (FCNSW 2025). FCNSW is government-owned and these are therefore losses to the NSW taxpayer.

This unprofitability is a longstanding pattern. From FY09 to FY14 the division operated at an average annual loss of $11 million (Campbell & McKeon 2016 pp.5). From FY16 to FY20, the division made a modest total profit of $12 million (FCNSW 2020 pp.11). However, this was due to restructuring (and job cuts). In FY15, the divisision “returned a positive EBIT [earnings before interest and taxes] for the first time in over ten years” due to “implementation of a new functional operating model” (FCNSW 2015 pp.5).

In its most recent triennial analysis of FCNSW’s native timber harvesting and haulage costs, the Independent Pricing and Regulatory Tribunal (IPART) concluded that “New South Wales’s native logging industry is not ‘economically viable’ and the state government should consider shutting it down after 2028 if its prospects do not improve” (Slezak 2024). (2028 is when most of the current wood supply agreements to processors are due to expire.) The IPART report was not released publicly but rather under freedom of information laws to the ABC.

In contrast, studies have shown that stopping logging in public native forests and instead managing them for conservation, carbon storage and tourism would yield net positive economic benefits (Cross et al. 2023; Frontier Economics & Macintosh 2021; University of Newcastle 2021a).

These studies do not take into account the many other environmental services provided by forests upon which our economy depends: clean air and water, regulation of the climate, stability of soils and the benefits of biodiversity to agricultural production such as pollination (FAO & UNEP 2020).

Further reading

Slezak, M. (2024). ‘Report says NSW government should review ‘long-term feasibility’ of native logging industry’, ABC News, 17 December. Available at: https://www.abc.net.au/news.

Campbell, R. & McKeon, R. (2016). Money doesn’t grow on trees. Discussion paper, The Australia Institute, March. Available at: https://australiainstitute.org.au/report/money-doesnt-grow-on-trees/.