NSW Forestry Corp Losses Double, Compliance Issues Mount

Forestry Losses Double to $29 Million Sparking Calls to End Native Forest Logging

The Forestry Corporation of New South Wales (FCNSW) has reported a staggering $29 million loss on its hardwood logging operations in the 2023/24 financial year, nearly double the $15 million loss of the previous year.

These figures, highlighted in the Corporation’s annual report, have reignited calls from conservation groups like the North East Forest Alliance (NEFA) to end the logging of public native forests.

NEFA spokesperson Dailan Pugh characterized the practice as an “economic basket case” that depletes public assets and accelerates species extinction.

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A Breakdown of the Financial Losses

The FCNSW 2023/24 Annual Report attributes much of the financial strain to a downturn in the structural lumber market. The Chairman and CEO noted:

“Sales of softwood timber fell short of targets for a second consecutive year due to a persistent downturn in the structural lumber market. As softwood sawlogs are primarily used in the construction of new homes, the decline in housing starts over recent years has contributed to this shortfall. Given that softwood timber sales are our largest revenue source, the financial impact of this downturn has been substantial, despite cost-containment measures being put in place.”

While demand for hardwood timber remained stable, revenue fell short due to a combination of external factors, including adverse weather, regulatory changes, and legal challenges. However, Pugh underscored the unsustainable costs of hardwood logging:

“The Forestry Corporation’s Annual Report 2023/24 identifies they made a loss of $29 million logging publicly owned hardwood forests, which equates to a loss of $3,058 for each hectare logged,” Mr. Pugh said.

He added that 9,484 hectares of native forests were logged, per the Biomaterial Report, at taxpayers’ expense.

The Hidden Costs of Logging

Logging costs extend beyond financial losses, encompassing significant ecological damage. Pugh emphasized that the activity harms iconic species like koalas and greater gliders while undermining forest ecosystems:

“It is outrageous that we are paying over $3,000 per hectare to log the homes of Koalas, Greater Gliders and hundreds of other threatened species on public lands.”

In addition to logging losses, FCNSW received $42 million in government grants and spent millions more from the Forest Infrastructure Repair Program.

Pugh outlined the broader consequences: declining yields due to over-logging, increased bushfire risks, invasive weeds, dieback, reduced water yields, and carbon emissions. He argued that preserving public native forests could generate economic benefits through recreation, tourism, and carbon sequestration.

Compliance Failures: EPA Actions Against Forestry Corporation

Adding to its challenges, the Forestry Corporation faced regulatory scrutiny from the NSW Environment Protection Authority (EPA). Between July 2023 and September 2024, the EPA conducted 20 inspections of Forestry Corporation’s operations, resulting in multiple compliance actions:

• 6 Show Cause Letters
• 1 Official Caution
• 3 Stop Work Orders
• 4 Penalty Notices

The EPA flagged breaches under the Integrated Forestry Operations Approvals (IFOA) framework in both coastal and western forests. These breaches, critics argue, reveal systemic issues within the Corporation.

“These are not minor infractions—they represent failures in compliance that further degrade public forests, endanger wildlife, and erode community trust,” Pugh stated.

The annual report acknowledged these failures:

“Action taken by the native forest regulator during the period led to convictions for breaches in operations conducted several years ago. We deeply regret these breaches and have accepted the penalties imposed. Non-compliance is unacceptable, and we have taken corrective actions enhancing our focus on compliance, investing in resources and technology, and continuing to implement the recommendations of the NSW Audit Office.”

The Future of Forestry in NSW

Looking ahead, the annual report indicated that the NSW Government’s initiatives could reshape the Corporation’s operations:

“We also anticipate further changes to our operating environment as the NSW Government continues its assessments for the establishment of the Great Koala National Park on the north coast and progresses with the development of a revised Forestry Industry Action Plan.”

Conservation groups like NEFA see these developments as opportunities to transition away from native forest logging toward sustainable alternatives. Pugh highlighted the potential of pine plantations, which already supply 91% of sawlogs, and manufactured timber products to meet Australia’s timber needs without depleting public native forests.

“Rather than subsidizing degradation of our public native forests, if we protect them, we can turn this loss into an economic benefit to the community from increased recreation, tourism, water yields, and the removal of CO2 from the atmosphere,” Pugh concluded.

A Turning Point for Public Native Forests

The escalating financial losses and compliance failures reported by FCNSW make it increasingly difficult to justify the continuation of public native forest logging. As the debate intensifies, the future of forestry in New South Wales hangs in the balance, with conservationists pushing for preservation and sustainable alternatives as a way forward.

The Forestry Corporation’s 2023/24 Annual Report, including full financial and operational details, can be accessed here.

Compliance actions taken by NSW Environment Protection Authority

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