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STT Forestry Losses $1.3bn in 20 Years

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Native Forest Logging is not sustainable by John Lawrence Whether or not we have a native forest industry and on what scale won’t be determined by economic sustainability. Tassie’s AFL side will be playing away games on Mars before that occurs. Yet the industry still pretends it is sustainable, judging by Nick Steel from the […]

Native Forest Logging is not sustainable

by John Lawrence

Whether or not we have a native forest industry and on what scale won’t be determined by economic sustainability.

Tassie’s AFL side will be playing away games on Mars before that occurs.

Yet the industry still pretends it is sustainable, judging by Nick Steel from the Tasmanian Forest Products Association (Talking Point, April 10).

In the 20 years of the Regional Forest Agreement (RFA) until 2017, the publicly owned Sustainable Timber Tasmania (STT) incurred cash deficits of $562m, including operating losses plus all the money spent on roads and plantations that failed to increase its assets base and are therefore expenses just like wages. Over the same period the value of native forests fell $752m and it suffered a huge increase in superannuation liabilities, which the government took over in 2017.

These balance sheet losses of $840m made overall losses over a 20-year period $1.3bn.

The cash losses were financed by government handouts plus the sale of almost all STT’s plantations.

The entire softwood estate was sold in two tranches for $133m and 30,000ha of hardwood plantations financed by governments to build a more sustainable STT were sold below cost for $60m.

When STT values its forest estate it estimates future harvest proceeds and then deducts harvest and cartage costs and holding costs until harvest. But it does not include roads to harvest or replanting costs, which are mandatory. Were it to do so, native forests would have nil value.

Read the full story on the Tasfintalk blog.

Source: Tasmanian Times https://www.tasmaniantimes.com/2021/05/overall-forestry-losses-1-2bn-in-20-years/#utm_source=rss&utm_medium=rss&utm_campaign=overall-forestry-losses-1-2bn-in-20-years

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