MPs call for state government to end its ‘fiscally irrational’ logging

A powerful group of state government crossbenchers has again called on the state government to end its loss-making logging of native forests after the Forestry Corporation’s hardwood division posted a $14.9 million loss in its latest half-year results.

A native forest logging site in Wild Cattle Creek State Forest that is part of the assessment area for the Great Koala National Park.Credit: Janie Barrett

In a letter sent to Treasurer Daniel Mookhey on Friday, the 12 MPs described public native forest logging as “one of the most fiscally irrational and environmentally destructive practices currently being maintained by this government”.

The MPs said it was costing taxpayers tens of millions of dollars a year to destroy ecologically valuable forests, despite the potential for jobs in plantations.

The letter was signed by all seven Greens members, Animal Justice MP Emma Hurst and independent MPs Alex Greenwich, Michael Regan, Jacqui Scruby and Judy Hannan.

MP for Sydney Alex Greenwich said: “Critical to ending native forest logging is respect for workers and a transition plan that genuinely supports them, their families and affected communities through the process. There are great opportunities to invest in sustainable industries across affected regions and that needs to be the focus.”

NSW Forestry Corp, owned by the state government, made a $14.9 million loss in its hardwood division – which is mostly native forest logging and a small number of hardwood plantations – for the first six months of the 2024-25 financial year.

This was $9 million below target, and the business attributed this to land management expenditure including delivering new tourism assets, as well as an upgrade to the recreation area in Coopernook State Forest that was an enforceable undertaking with the NSW Environment Protection Authority for a breach in 2019.

Forestry Corp blamed rain in northern NSW, and the impact of protests and stand downs. There have been near-constant protests on the Mid North Coast, where the government has promised to create the Great Koala National Park but has failed to do so after nearly two years in office.

Forestry Corp also cited regulatory changes, including the establishment of new protected areas in Koala Hubs – the government’s stop-gap measure to protect the endangered species while the Great Koala National Park is assessed – and the implementation of new conditions for greater gliders.

Finally, a milder winter in western NSW meant Forestry Corp sold less firewood.

Forestry Corp said: “It is incorrect to claim that native forestry operations are universally loss-making or subsidised. Forestry Corporation generates commercial revenue that funds a range of public land management services – including free public access, camping and recreational facilities, fire protection, and invasive species control – which do not directly generate revenue but are essential community services.”

A spokesperson for Treasurer Daniel Mookhey said the NSW government was working with Forestry NSW and the broader sector to finalise a Forestry Industry Action Plan.

“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. We recognise that Forestry is facing challenging times, from weather events to regulatory changes.”

The letter from the crossbenchers says the result continues a trend of sustained losses, with Forestry Corp’s hardwood division posting nearly $90 million in cumulative deficits since 2020.

“These figures reveal a public asset being run as a loss-making venture, funded by taxpayers, degrading our most ecologically significant landscapes, and offering diminishing economic return,” the letter says.

The MPs argued that Forestry Corp also faced rising legal liabilities – it has been subject to multiple legal proceedings for non-compliant and allegedly unlawful logging operations. Land and Environment Court Justice Rachel Pepper has described the organisation as having “a pattern of environmental offending” with poor prospects of rehabilitation.

This risk has increased significantly since the High Court recently ruled that community organisations with a demonstrated special interest have standing to bring cases against Forestry Corp for breaches of environment protection laws.

The MPs asked for the 2025-26 budget to incorporate into the forward estimates the full cost of native forest logging, including financial losses, legal risks and ecological impacts. The budget should also allocate funding for a just transition out of public native forest logging by the end of 2025, and invest in ecosystem repair, biodiversity accounting and regional job creation through sustainable land stewardship.