Logging - a dead loss for Victoria

As Victorian’s head to the polls this November, the issue of native forest logging is looking increasingly likely to feature as a major environmental issue in the state election campaign.

The overwhelming majority of Victorian voters support protection of native forests, in fact over 90% of Victorian’s want public forests protected for wildlife, tourism, recreation and a safe climate, and only 7% believe public forests should be logged for wood and paper products![1]

Friends of the Earth’s forest campaigners have been hitting the streets in several suburban electorates recently and in our conversations with voters we’re finding people are concerned with economic issues relating to logging and the industry's reliance on public money.

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Logging of native forests is carried out by the state government logging agency VicForests, a government business enterprise that functions in the same way as a corporation but with the benefit of government money to run off.  

VicForests receives the benefit of several ‘state government-gifted advantages’ – not least it’s feedstock of trees – that is as good as free. The forests it cuts down are natural ecosystems growing on public land that belong the all Victorian’s. Many have been growing naturally for over one hundred years.

These forests are allocated to VicForest by the state government at the cost of only having to secure their replacement or regeneration for seven years. This means VicForests are only obligated to ‘care’ for the forests for 7 years after which they are handed back to the state. That compares to the 83 years regeneration time frame for mountain ash forests and 113 years for mixed forests.  

PS_L6A8621.jpgTens of millions of dollars of tax payer’s money has been propping up the native logging industry, which regularly fails to pay dividends back to the state. For the first ten years of VicForests existence, between 2004 and 2014, VicForest only managed to return $5 million to the state, despite having an annual turn over more than $100 million since 2007[2].

In the last four years their profitability hasn’t improved with just $1.5 dollars in dividend payments returned to the state since 2014. VicForests also gets access to cheap government-backed debt, tax breaks and occasional grants.

Logging in East Gippsland is entirely unprofitable and loses up to $5.5 million dollars a year[3] as the high costs associated with cutting the trees down and transporting the wood makes the entire industry in that region is economically unviable.    

In 2016 a Pricewaterhouse Coopers economic report concluded that $5 million of investment in roads, machinery and equipment is required to create a single timber job[4]. This is about 12 times more than the average level of investment required to create a job in every other industry.   

Every $1 of investment in native forestry delivers just 3 cents in direct and 11 cents in indirect benefits to the state economy, or 14 cents in total. That compares to $1.63 for the forestry sector as a whole, and $2.65 for the manufacturing sector.             

The report concludes that continued native forest logging is uneconomic and that support for other industries, including plantation forestry and tourism would generate greater returns.

Logging loses public money while devaluing other economic benefits of forests

Research by the Australian National University has quantified the economic value of forests in the Central Highland’s within the proposed Great Forest National Park.

Using the System of Environmental Economic Accounting (SEEA), an internationally recognised statistical standard that is used in more than 50 countries. Ecosystem Accounting incorporates both economic and environmental data to compare various land use activities and the trade offs between different activities.

The research found that transitioning away from logging native forests would contribute net economic, social and environmental benefits to the Central Highlands[5].  

The economic value of the Central Highlands forests, and their contribution to the economy of Victoria, is immense when quantified using the SSEA. The ANU research found that the economic value of forests for their role in supplying water is 25 times more than the economic value from logging.   

Key findings from the research show that the Central Highlands forests add:

✓$310 million to Victoria’s water supply each year

 ✓ $260 million to the tourism industry each year

 ✓ $49 million for carbon sequestration each year  

Logging native forests in the Central Highlands adds just $12 million a year and the diminishes the other values that are worth far more to the Victorian economy. If logging of native forests was to cease in the Central Highlands the economic value of the forests for water, tourism, carbon sequestration and agriculture would increase annually.  

Read a summary of the research here.

Download the published research report here  

Job creation opportunities through the creation of the Great Forest National Park

In 2017 an independent economic report by the Nous group concluded that the creation of the Great Forest National Park would be a boon for jobs in regional Victoria[6].

Read a summary of the report here

Download the full report here

Through improving basic infrastructure and investing in in the establishment of a hiking trail from Healsville to Eildon an estimated 520 job could be created and $48 million added to the economy each year. In total the creation of the park would provide Victoria with a $71.1 million economic boost annually and for an investment of $45 million from government and private enterprise, the Park’s creation would and create 760 full-time jobs[7].  

Protecting native forests – a great investment for Victoria

 Our forests are worth so much more to Victorian’s if protected from logging. For water, wildlife, climate and tourism. The longer the state government allow logging of our forests more Victoria loses. 

Take action! Contact Victorian Treasurer Tim Pallas and let him know that protecting our world class native forests is a great investment for the future of Victoria.

Email - tim.pallas@parliament.vic.gov.au

Phone: (03) 9651 5201

[1] ReachTEL conducted a survey of 1,649 residents across Victoria. The survey was conducted during the night of 7 December 2016. People were asked: Victoria has over three million hectares of publicly owned state forests. Of the following, which do you think is the best use for these state forests: Responses were: Wildlife, trees and nature to be protected 56.2%; Commercial tourism 7.4%; Recreation activities 21.4%; Logging for wood and paper products 7.1%; Safely storing carbon in trees 7.9%.

[2] Dunckley, M. VicForests chasing its tail, Australian Finacial Review, March 5, 2014, http://www.afr.com/opinion/vicforests-just-chasing-its-own-tail-20140304-ixnjr

[3] Arup, T., Logging in East Gippsland losing up to $5.5 million a year, The Age, May 27, 2015. https://www.theage.com.au/national/victoria/logging-in-east-gippsland-losing-up-to-55-million-a-year-20150527-ghb0ao.html

[4] Pricewaterhouse Coopers, Rethinking Victoria’s approach to forestry, June 2016.

[5] Keith, H., Vardon, M., Stein, J.A., Stein, J.L. and Lindenmayer, D., 2017. Ecosystem accounts define explicit and spatial trade-offs for managing natural resources. Nature ecology & evolution, 1(11), p.1683.

[6] Nous Group, Great Forest National Park: economic contribution of park establishment, park management and visitor expenditure. Download here 

[7] ibid