Dr WOODRUFF – Minister, on the Forestry Tasmania’s 2027 contracts, can you tell us what the current status of negotiations are for the long-term native wood supply contracts that are due to expire in 2027?
Mr ELLIS – When we’ve got the STT staff here at the table with us next week, I’m happy to go through that. What I can say at a high level is that they’re working through those negotiations, and it’s an important resource for the future as that wood supply comes online. We’re also working to support our sawmillers through that process with the change in the nature of that resource, and potential change in the nature of the market. We can talk more about that, but any questions regarding Sustainable Timber Tasmania is probably best, when they’re here at the table next week.
Dr WOODRUFF – Thank you. In regard to your policy decisions that will govern – your government’s policy decisions that will govern any changes or not to those contracts, are you considering removing or making any changes to the legislated sawmill quota?
Mr ELLIS – We will be working through a process. It’s a changing resource that’s coming through and there will certainly need to be some consideration of the way that those logs are categorised under our existing regulatory structure, but we will be working through the process with STT. We will of course take all those matters into consideration. I will just look to the Secretary of State Growth, if there is anything further that we want to add.
Dr WOODRUFF – Is that a yes, no or maybe on considering making changes?
Mr ELLIS – We are working through it. Certainly, on its face, it’s a different resource coming through and it’s important that those regulatory categories take that into account.
Dr WOODRUFF – On the industry, the Forestry Tasmania’s annual report and statement of corporate intent paints the picture of a native forest industry that’s in decline. The 2025‑26 statement of corporate intent says:
… references poor market conditions, reduced demand for domestic soil log and veneer log, subdued wood chip markets, supply chain pressures, challenges in maintaining workforce levels, and of course, a significant reduction in native forest resource volumes post 2027.
It also says that:
The sale of hardwood plantation logs will be critical to the organisation’s long‑term financial viability.
Minister, the markets are clearly changing and multinationals prefer to buy plantation products rather than native forests. You have an incredible opportunity in front of you to have a modern and sustainable industry into the future. Will you extend a viable, sustainable forest industry and provide something that is possible by ensuring that all future wood supply contracts from 2027 are plantation only?
Mr ELLIS – No, and there are good reasons for that, Dr Woodruff. The Tasmanian government continues to drive economic growth in the forest industry by implementing policy to create jobs and support regional communities across the state. We’re strongly supportive of a sustainable and thriving local forestry industry and both government and industry are strongly focused on achieving the highest possible value from every tree in Tasmania’s production forest. Well‑managed working forests create jobs and investment opportunities, particularly in regional communities such as ours. There are over 5700 direct and indirect jobs in Tasmania because of the forest sector. Our forestry sectors already worth about $1.2 billion annually to our economy, including $712 million directly at point of sale. Our goal is to grow that even further.
We’ve spoken about the importance of ensuring that that growth happens through value adding and also unlocking opportunities in the private market. In terms of total wood production for 2023‑24, that was just over 4.2 million tonnes across all forest types. Private forest accounted for about 3 million tonnes, public forest about 1.26 million tonnes and total wood production for 2025 was approximately 4.1 million tonnes across all those types.
I believe there are some excellent opportunities working through the value add, for example, the remaining volumes coming through Tasmanian ports, we often see sawn timber exports to domestic and international markets, and we’re committed to working closely with our native foresters. It’s also worth giving a shout out to our team at STT for their work during the west coast complex of bushfires over the summer. 70 per cent of STT staff are trained firefighters. They’re one of our three key fire agencies and certainly I know many of our communities are very grateful for our forest firefighters, for the work that they do in protecting communities and assets and environmental values.
Dr WOODRUFF – Minister, in your previous answer to a question you talked about the money that the forestry industry brings to Tasmania. However, it is a fact that government subsidies over the last year have kept Forestry Tasmania afloat combined with a non‑cash re‑evaluation of the value of the forest estate based on its carbon value. Do you agree that without a government subsidy of $12 million and a non-cash biological asset evaluation of $7 million, Forestry Tasmania would have made negative $15 million in the last financial year?
Mr ELLIS – Thanks Dr Woodruff. Obviously, Sustainable Timber Tasmania GBE scrutiny is next week. We’ll have people available at the table but I am happy to speak at a high level. If there wasn’t any timber produced from STT they would also make a loss. Fortunately we manage the land for multiple use. That includes timber and carbon. That’s why we’ve made a profit for the last eight years with Sustainable Timber Tasmania, including the most recent one of course, which we will be discussing. Like many of our GBEs, the STT provides a range of different community service obligation benefits that includes firefighting, road access for recreational purposes, beekeeping and a whole range of different opportunities.
That is one of the beautiful things about forestry. It captures carbon naturally; it creates beautiful timber products; it provides fibre for a plastic-free future. Certainly, because we manage land for multiple uses as part of the reason why we’ve been able to deliver a profit for Sustainable Timber Tasmania (STT) for the last eight years, despite the many, many services that it provides to the community.
Dr WOODRUFF – Well, thank you. That wasn’t an honest answer because I talked about the fact –
Mr ELLIS – Well it certainly was, Dr Woodruff.
Dr WOODRUFF – Well, I talked –
Mr ELLIS – I don’t want to have to make you withdraw things around honesty and all that sort of stuff. But I think we can sort of work through that in a genuine way.
Dr WOODRUFF – Well, my question was about the subsidies that mean that – you’ve just talked about it as a profit and the only reason it can get there is because the government has subsidised it. As I said it would otherwise, without subsidies, without non-cash biological asset evaluations of $7 million, it would have been in the red $15 million.
So Forestry Tasmania’s target for net cash flow from operations was an embarrassingly low $3.5 million in 2024-25, but it failed to reach even that, and it only scrounged $1.8 million with an underlying net profit of just $800,000, that is with the subsidies I’ve already talked about. That’s pretty dire, minister. Continuing to subsidise this industry is simply throwing good money after bad. Even if you won’t end native forest logging, will you commit to ending government subsidies for Forestry Tasmania?
Mr ELLIS – Dr Woodruff, again, I mean, we’re clearly talking across purposes here on a range of different things, including the fact that STT hearings are next week. In terms of community service obligations, STT do fuel-reduction burning and bushfire management. 70 per cent of their staff are trained in that. Do you think that would be provided for free by any other company.
Dr WOODRUFF – Well on community service obligations, we have a conversation about that every single year.
Mr ELLIS – We certainly do.
Dr WOODRUFF – So-called community service obligations and public services that that company performs are in exchange for government subsidies. Do you recognise that this is public land and those services would be performed by another public entity with subsidies with if Forestry Tasmania wasn’t doing it? Wouldn’t it be better for Tasmania to invest the $12.13 million annually into Parks and Wildlife, or the TFS rather than into a loss-making entity like Forestry Tasmania.
Mr ELLIS – As I mentioned before, STT continues to make a profit. I’m happy to talk about that next week. Part of the reason why we make a payment to the business to provide support for these important matters is because it’s a highly efficient way of doing it –
Dr WOODRUFF – Because it can’t stand on its own two feet.
Mr ELLIS – Certainly we’re seeing in other jurisdictions where they’ve made the very poor decision to end native forestry, the costs of delivering those services are much higher. I think it was in Victoria, they’ve recently announced that the cost of their native forest shutdown is so far $1.5 billion, $1.5 billion. That is enormously damaging to that state’s economy and it hasn’t stopped the demand for renewable resource like timber.
What it’s done is meant that they’re importing it from other locations. Whether it’s Europe, which does a huge amount of native forestry, indeed there are very few countries that have significant plantation industry in Europe. Despite that, and despite being a relatively small land mass compared to Australia with many more consumers, they are exporting, or alternatively we could import timber from countries that don’t manage their lands and environments at the same quality and degree that we do here in Tasmania.
So I think it’s been widely acknowledged that native forestry is important. The Greens seem to support growing trees and cutting them down, but only if it’s one kind of species. Through native forestry we do that through multiple species on any given part of land and they’re a native species. I think that gets the balance right. It is pleasing that they’ve delivered another profit. It’s also pleasing that many of our –
Dr WOODRUFF – It’s not a profit, don’t be dishonest. It’s subsidised.
Mr ELLIS – Thanks Dr Woodruff, it’s also pleasing –
Dr WOODRUFF – That’s why you made it into the black.
Mr ELLIS – It’s also pleasing that STT staff have received the Operational Service Medal from the Tasmania Fire Service for their work in the west coast complex of bushfires because these people go above and beyond to serve our community and this appropriate recognition of it.
