NSW forestry assets won’t be sold following bushfires

NSW forestry assets won’t be sold off due to the bushfires which burned through the state’s plantations.

NSW forestry assets won’t be privatised due to fires which burned through the state’s softwood plantations. Picture: AAP

A decision not to privatise $1bn worth of NSW forestry assets due to the recent bushfire calamity will not affect the state’s budget position, according to NSW Treasurer Dominic Perrottet, who says no money had been allocated from the prospective sale.

After months of speculation and uncertainty for timber employees, the NSW Government on Thursday said a prospective long-term lease of the state’s softwood plantations would not go ahead due to the damage caused by the summer fires.

The Australian revealed in January that plans to sell-off these plantations had been jeopardised following a preliminary assessment of the forests which found more than 50,000ha had been scorched, making the sale potentially unviable.

The damaged area amounted to nearly one-fifth of total softwood plantations, a spokesman for the Forestry Corporation of NSW said last month. The Corporation oversees 230,000ha of plantations in the central west, south and north of NSW.

Speaking to The Australian, Mr Perrottet said the prospective sale of NSW Forestry Corporation assets had only ever been an option, not a “fait accompli”. He said privatisation was one several considerations for the agency, which was subjected to a scoping study to assess its efficiency, not to raise capital.

“This was about making sure we run our businesses as efficiently as possible for the benefit of our state,” Mr Perrottet said. “We had never made a decision or budgeted for proceeds to be invested in other projects.”

Had the sale gone ahead, it is almost certain the money would have been used to prop up further infrastructure spending, a cornerstone of the Berejiklian government’s program.

According to the most recent NSW budget papers, the state’s net debt is forecast to expand significantly over the next three years, brought on by spending on tunnels, stadiums, roads and other major projects — from $25.3 billion in 2021-22 to $41.4 billion in 2022-23, when the next election is expected to be held.

Leasing the softwood plantations was unlikely to have eased much of this debt burden, but the money would have been useful. A revenue downgrade is already being forecast for the budget, sources said, due to the impact of the fires and the compouding challenge posed by the Coronavirus.

Mr Perrottet brushed off the notion that the Forestry proposal would be replaced by another leasing arrangement to make up the billion-dollar shortfall.

According to its website, the Forestry Corporation of NSW is the largest grower of plantation pine in the country, and produces enough timber to construct one-quarter of all houses built across Australia each year.

The smaller, younger trees that it grows are usually harvested for pulpwood used to make paper products and particleboard; house frames and furniture are made from trunks cut from stronger, mature trees.

Labor’s Paul Scully, the NSW shadow minister for natural resources, welcomed the news that the leasing arrangement would not proceed. But the scoping study, he said, had been a waste of taxpayers’ money.

“The government insisted on a grotesque spending spree, doubling the original cost of its scoping study to $1.3 million, whilefires raged through forests and plantations up and down the east coast of New South Wales,” Mr Scully said.