If a taxpayer subsidy falls in the forest, and no one hears it…


The Western Australian government’s state owned Forest Products Commission (FPC) is logging WA’s native forests at a financial loss to the state, as shown in a new report from The Australia Institute, titled Barking Up the Wrong Trees.

“The people of Western Australia are losing jarrah and karri forests, and in the process making a financial loss,” Report author and researcher at The Australia Institute, Tom Swann said.

“Even if you love money more than you love trees, this not a good outcome — especially for a state increasingly under budgetary pressure.”

The FPC has received far more in government payments than it has generated in profit. Net cash payments from the government have totalled $110 million, and the FPC’s equity has declined in real terms, when accounting for “equity injections” – cash payments from the government.

In recent years FPC’s native forestry, in the South West forests, dragged down overall performance:

  • Native forestry profits have fallen, with losses in each of the last four years totalling $34m.
  • Production is down, as are yield per area and quality, with increasing volumes of native forest timber going to lower value use like woodchip and charcoal rather than high quality sawlogs.
  • Forest values have also declined, reflecting little optimism about future prospects.

“This situation is not unique to Western Australia; state-owned native forestry has become a financial burden around the country.  It is counter-productive to lose money on logging native forests, especially when there are alternatives including plantations, tourism and carbon offsets” Swann said.

“Plantations dominate WA forestry and production has been growing for years. With the FPC announcing a new focus on plantations, there is even less reason to continue native forest losses.

“A phase out would both protect forests and state finances, and allow a transition plan to manage impacts on the relatively small native forestry work force.

“The WA taxpayer is in effect giving a dollar, losing a tree, and getting 50 cents in return” Swann said.

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