The Perrottet government found native logging could be ended in New South Wales without costing the budget but opposition from the Nationals blocked the proposal.
A plan to end the controversial and loss-making practice of timber extraction from native forests was prepared by the environment department by October 2022.
It won backing from the Liberals, including the then environment minister, James Griffin, but did not make it to cabinet because it was opposed by the junior Coalition partners.
The report found Treasury could cover the cost of compensating affected workers, companies and communities by finding markets for the avoided destruction of biodiversity and release of carbon emissions. Financial firms such as Macquarie Bank would secure revenue streams from firms looking to offset their environmental impacts elsewhere, exceeding the compensatory costs.
“That plan is ready to be activated if Labor wants to do it,” a member of the former government said. “The political landscape has changed” with March’s election of the Minns government, making it possible to bring it forward.
The revelation that native forestry could end in NSW without a heavy budget toll will add pressure to the new Labor government to follow the lead of Victoria and Western Australia, which have decided to end native forest logging by next year.
Victoria’s move, announced in Tuesday’s 2023-24 budget, brought forward the end of the industry by six years and will cost an additional $200m in support payments.
“As the former minister with responsibility for the environment, I saw – and still see – great opportunity for carbon sequestration, conservation and recreation right across our conservation and parks estate,” said Griffin, now the shadow energy minister.
“The opportunity that exists [in ending native forestry] is one that can’t be denied.There is a compelling economic case, let alone an environmental one, for conservation of native forests.
“Most people would expect this Labor government to take a good look at what’s happened in Victoria and right around Australia.”
Guardian Australia approached the NSW environment minister, Penny Sharpe, and the Nationals leader, Dugald Saunders, for comment.
Sue Higginson, the Greens environment spokesperson, said there were already several reports showing it would not be costly for the budget to exit native logging now.
Last year’s report by Frontier Economics, commissioned by WWF, found the cost of industry adjustment would be $302m, starting from 2028-29. Some 1,070 workers would be affected.
Displaced employees would be able to find alternative jobs, including in managing the protected forests and tourism. The end of the loss-making hardwood division of Forestry Corp NSW and avoided spending would outweigh the costs, it found.
A separate study into the carbon value of the forests at risk of logging put it at $2.7bn.
“You come to the economics and you think ‘it must be about the money’ and you fall off your chair,” Higginson said, noting the industry lost $30m over the past two years excluding $80m in subsidies after the bushfires and floods.
“In terms of the economics, it’s unfathomable that we’re still logging at this point of time. If you look for the case for fire and landscape resilience, we must have stopped by now.”
Separately, the government dismissed criticism by the NSW Nature Conservation Council that it was allowing Forestry Corp to proceed with logging of 17.7% of the area earmarked for Labor’s proposed great koala national park over the next 12 months alone.
The estimate was based on the corporation’s operations plan portal that showed it intends to log 30,813 hectares. It could apply for similar amounts in coming years until halted by the government.
The government has started planning for the park and will assess the scale of economic support needed for the communities affected. It is not considering a blanket ban on forestry operations in the area.
“Before the election we committed to no moratoriums,” Sharpe said. “I stand by that promise.” She added that the government wanted to create the new park “as soon as possible”.
“As the process is being established, the Environment Protection Authority is engaging with Forestry Corp of NSW to encourage them to take a precautionary approach to conducting forestry operations in areas with highly suitable koala habitat, and to ensure such values are maintained if forestry operations are necessary in these areas.”
