The latest state government announcement of an additional $67 million in funding to manage Western Australia’s forests adds to the financial folly of the populist decision to close the sustainable timber industry.
In September 2021, the WA government announced it would end native forest harvesting in the state from January 2024. The decision effectively ‘preserved’ about 400,000 additional hectares of hardwood forests – karri, jarrah and wandoo – meaning nearly two million hectares of native forests will be “protected for future generations”.
The government is also investing a record $350 million to expand the state’s softwood plantations (mostly pine) to “support jobs and create a sustainable future timber supply”.
The state’s $80 million Native Forest Transition Plan was devised to support workers, businesses, and regional communities during the transition.
All the forest management paid by a commercial industry must now be met from the public purse.
To date, and in the forward estimate period, the state will lose about $1.2 billion in the industry’s economic value and extra expenditures by the WA government.
The industry will shrink to about 25% of its former size when it provided $240 million in economic value to the state. This represents an economic loss of at least $800 million between the announcement and 2028.
The government has had to put its hand in its pocket for numerous costs and charges, either to cover costs previously paid for by the timber industry or consequential compensation impacts of its decision.
These amount to an estimated $405 million, including:
- $151 million to fund ecological thinning costs.
- $67 million to manage forests.
- $24 million to implement the Forest Management Plan.
- $80 million in its transition plan to pay off workers and compensate businesses and provide grants to unrelated southwest businesses.
- $50 million (estimated) to pay off the Parkside Timber Group. (This arrangement is confidential, so the amount hasn’t been disclosed).
- $35 million to prop up the FPC which is running out of cash.
In a bizarre twist, the former McGowan government complained that the Forest Products Commission wasn’t operating at a profit and gave this as one reason for closing the forests.
Any small losses by FPC were trivial in comparison to the massive cost of the Cook government largesse.
Of course. politicians don’t want you to remember the alternative facts they indulged in.
