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Plan to bring the timber industry into the 21st century would foster a manufacturing jobs renaissance in regional Australia 

Plan to bring the timber industry into the 21st century would foster a manufacturing jobs renaissance in regional Australia 

A new strategy to secure long-overdue reform of the Australian timber industry would provide protection against supply chain disruption in construction, foster a manufacturing jobs renaissance in regional Australia and accelerate efforts to tackle the housing crisis, according to a policy paper released today by the Australian Climate and Biodiversity Foundation as part of its Forest Futures campaign.

Growing Australia’s Timber Industry: Policy Option Paper 1 recommends a $350 million investment package to enable a rapid transition out of native forest logging by supporting the plantation sector and provide the conditions to enable Australia to become a manufacturer of plantation sourced engineered wood products, replacing $312 million in annual imports that have become subject to very high climate-related risks, while creating new manufacturing jobs across regional Australia.
 
Australian Climate and Biodiversity Foundation Chairman Dr Ken Henry said the investment would support  Australia's housing construction industry while providing the opportunity to create good jobs  in regional communities.
 
“Much of the Australian forestry industry avoided the microeconomic reforms of the 1980s and 1990s. It has been an economic basket case for years, with large amounts of taxpayer money wasted on propping up the environmentally destructive native forest industry," Dr Henry said. 
 
“The native forest industry has not been an important supplier to the construction industry for decades. It is time to end taxpayer handouts and market distortions for native forest logging and it is time to support and encourage the more economically rational and environmentally benign plantation industry. The plantation sector has been badly let down by the peak timber industry lobby which appears captured by the interests of the few remaining native forest loggers.
 
“Government now has the opportunity to develop a set of industry adjustment measures that provide better jobs, attractive investment opportunities for institutional capital, and ensures timber continues to play an important role in Australia’s future.
 
"Right now, we're spending hundreds of millions importing engineered wood products. There is nothing wrong with imports. But we have seen in recent years that supplies can be disrupted by climate-related risks that are only going to get worse. Meanwhile, the domestic workforce is facing a period of significant uncertainty and disruption as native forest logging comes to an end – as it must.  With the right set of policy interventions, there are good quality jobs available in this sector. 

"We could be manufacturing engineered wood products in regional Australia. Northern Tasmania, southern NSW, Victoria's timber regions, Wide Bay in Queensland, South Australia's Green Triangle - these communities could all benefit from new manufacturing investment.
 
"With housing availability at crisis levels, we're still building homes the same way we did fifty years ago. Meanwhile, countries like Sweden and Germany have slashed construction times and costs through advanced timber manufacturing.
 
"This investment would help Australian manufacturers tap into these proven construction innovations, creating secure regional jobs while delivering more homes for Australian families."
 
The proposed package includes:

  • $200 million for an Engineered Wood Strategy to build domestic manufacturing capacity for advanced timber products
  • $150 million for a Future Plantations Program to secure construction timber supply through targeted plantation expansion

Dr Henry said the investment would particularly benefit regional communities already home to timber processing facilities.

The policy paper highlights the growth potential of Australia's plantation forestry and manufacturing sector which currently employs 42,000 people, with 30,000 working in plantation product manufacturing, 5,000 in sawmilling, and 8,000 in growing and harvesting plantation timber.

"Only 5% of Australian housing construction currently uses modular or prefabricated components, compared to 45% in Northern Europe. This investment package would help Australian manufacturers catch up to global best practice, creating high-skilled jobs while helping solve our housing affordability crisis," Dr Henry said.

The policy options paper is the first in a series to be released in the lead up to the federal election.

Key facts:

  • Plantation forestry provides 42,000 jobs, 30,000 of which are in manufacturing

  • $312 million worth of engineered wood products are imported annually from China, Russia, Europe and New Zealand (2024)

  • 45% of Northern European housing uses modular construction vs just 5% in Australia, delivering 20-50% faster construction times and up to 20% cost savings

  • 75% of Australian construction timber comes from Australian plantations, generating 70% of the timber industry's economic value
  • There has been a 31% decline in hardwood plantation estate between 2008-2022, with 90% of remaining hardwood plantations exported as wood chips

  • Australia last updated its National Forest Policy Statement in 1992

  • Native forest logging is in terminal decline with volumes of wood harvested falling by 80% since 2004

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