Tasmania should withdraw subsidies for native forest logging, Canberra-based Australian Institute recommends, claims forest peace deal has cost taxpayers AU$420M since 2011 in sector that employs 0.4% of workforce

Wendy Lisney

LOS ANGELES , December 17, 2013 (Industry Intelligence) – The Canberra-based Australian Institute has issued a report recommending the Federal and Tasmanian Governments gradually reduce subsidies to Tasmania’s forestry sector, ABC News reported on Dec. 16.

The report claims governments have invested hundreds of millions of dollars to the industry, citing the forest peace deal that has cost taxpayers about A$420 million since 2011. The subsidies, says the report, were supposed to contribute to overall economic health in Tasmania, but instead were absorbed by key players in the forestry industry.

The report states that the forestry sector returns few jobs for the amount given in subsidies - only four jobs per $1 million - compared with other sectors such as private education, which turns out about 20 jobs per $1 million. Furthermore, the forestry industry employs only about 0.4% of the Tasmanian workforce and accounts for about 0.5% of the state’s GDP, the report states.

The report suggests that the importance of forestry to Tasmania has been largely overstated and that subsidies to the food and tourism industries would prove more rewarding.

It also claims that the large sums of money put into the forestry industry, with little benefit to show for it, are partly to blame for the state’s economic trouble. The report recommends that the government should withdraw subsidies for native forest logging and invest in services instead.

Commenting on the report, lead author Dr. Andrew Macintosh from Canberra's Australian National University said the state's policymakers seemed convinced that the interests of the dwindling forestry industry should be placed at the heart of their plans for Tasmania's economy, even though the industry employs a "trivial" proportion of the workforce.

But Premier Lara Giddings has said it is "critical" that government steps in and supports the industry through tough economic times, adding she does not believe Tasmanians are opposed to subsidizing the industry. Liberal leader Will Hodgman has also indiciated that he wants to give the industry more attention if his party wins government office, claiming forestry is a provider of thousands of jobs.

The primary source of this article is ABC News, Hobart, Australia on Dec. 16, 2013.

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