A Crisis of Confidence: The Tangled Web of Australia's Native Forest Policy
A series of interconnected developments involving state and federal forestry policy have emerged, concerning the accountability of Victorian transition funding, the interstate movement of Tasmanian native forest logs, and a new federal carbon credit method for native forest management.
Part I: The Missing Millions
Victorian Forestry Transition Fund Accountability
The Victorian government allocated $1.5 billion to support the transition away from native forest logging, which was banned effective January 1, 2024. A report by Environmental Justice Australia (EJA) and forensic accountants Clarium Forensics found that $884.7 million of this funding has been publicly accounted for, leaving $615.3 million unaccounted for in public records.
A state government spokesperson provided a list of initiatives totaling $1.51 billion, including:
- $200 million for timber harvesting transition support
- $151.9 million for forest management
- $193 million for worker transition support
However, no documentation or links were provided to confirm these expenditures.
Auditor-General's Findings on ForestWorks
The Victorian Auditor-General Andrew Greaves reported in April that ForestWorks, an industry-owned nonprofit, received at least $71 million in public funding for skills and training programs for forestry workers and their families. The auditor-general found that ForestWorks:
- Failed to maintain accurate records
- Did not conduct eligibility assessments for 50 sampled workers
- Issued hardship payments to 32 individuals who also received other government payments, violating its own criteria
Financial records from the Australian Charities and Not-for-profits Commission showed ForestWorks' 2025 revenue was $23.67 million, with 99.47% derived from government funding. The organization paid the Construction, Forestry and Maritime Employees Union $619,990 in 2025 for services, director fees, and rent. ForestWorks chief executive Mike Radda stated the organization supports the auditor-general's report with minor clarifications.
Part II: Logs Across the Strait
Compensation Payments and Interstate Timber Sourcing
A Four Corners investigation documented Tasmanian native forest logs being transported to Victorian sawmills. Specific payments included:
- Powelltown Sawmills: $9 million in compensation
- Australian Sustainable Hardwoods (ASH): Over $49 million in compensation
ASH managing director Vince Hurley stated the compensation was a penalty payment the company was legally entitled to, and that the money was reinvested to expand manufacturing and retain 200 jobs. Forensic accountant Daniela Juric reviewed ASH's books and stated that government money enabled the company to purchase timber from Tasmania.
In 2017, the Victorian government paid $61 million for a 49% stake in ASH. The controlling shareholders subsequently borrowed from ASH to purchase a Tasmanian sawmill, with government approval.
Government Response
Victorian Premier Jacinta Allan stated the government was backing workers and regional communities.
Part III: What Was Promised vs. What Happened
Correction of Official Statement
Sustainable Timber Tasmania (STT) corrected an earlier statement to a parliamentary committee, confirming that some sawlogs from Tasmanian public native forests were processed interstate. STT's acting CEO had previously advised that all sawlogs delivered by STT were processed in Tasmania.
STT CEO Dean Kearney wrote to a government committee updating an answer given in parliament in November 2024. STT stated it has since learned that a "small quantity" of sawlogs were onsold by Tasmanian customers and processed interstate. STT said it was not informed of these arrangements at the time.
Contractual Arrangements
STT confirmed that existing contracts with sawmillers did not require logs to be processed in Tasmania. This requirement will be included in contracts for the 2027-2040 period.
Documentation and Observations
Environmentalists Paul O'Halloran and Patrick Johnson documented hundreds of log trucks at the Devonport ferry terminal over three years. The Tasmanian government previously stated these logs came from private forests.
James Neville-Smith, owner of a third-generation timber business, confirmed he has sold logs from Tasmanian state forests to Victorian sawmills. Neville-Smith cited the need to process logs after retooling his sawmill for plantation timber as the reason. Logs with STT stickers were observed at a mill in Powelltown, Victoria.
Government and Political Responses
- Tasmanian Resources Minister Felix Ellis said it is "disappointing to hear that some logs from state forests may be being on-sent interstate for processing"
- Tasmanian Labor resources spokesperson Shane Broad said the minister needs to explain what checks and audits were undertaken before assurances were given
- The Victorian Greens announced plans to introduce a bill to prevent Victorian mills from processing native timber from anywhere in Australia
- Tasmanian Greens leader Rosalie Woodruff said community concerns about log volumes had been dismissed for years
Industry Context
Sustainable Timber Tasmania stated harvesting levels have remained at 5,000–6,000 hectares per year for the past five years.
Part IV: A New Carbon Economy for Forests
Federal Carbon Credit Method for Native Forest Management
The Australian government approved a new Australian Carbon Credit Unit (ACCU) method called Improved Native Forest Management, announced on June 26, 2026. Assistant Minister Josh Wilson stated the government approved the regulatory change and has "no plans to end logging."
How the Method Works
- State governments can earn carbon credits by permanently ceasing native forest logging in designated protected areas
- Each credit represents one kilogram of emissions prevented or removed from the atmosphere
- Projects must permanently stop logging; credits are repayable if logging resumes within 100 years
- Adjoining land must see at least a 20% reduction in logging
- Leakage clauses penalize increased logging elsewhere in the state or increased unsustainable timber imports
- Bushfire-affected areas receive discounted credit rates until forest restoration
State Participation
- New South Wales plans to use this method to create the Great Koala National Park, a 176,000-hectare reserve near Coffs Harbour, fulfilling a decade-old election promise
- Queensland and Tasmania are eligible but have ruled out participation due to job concerns
- Victoria and Western Australia are ineligible as they ended logging earlier
Statements
"This method is voluntary and a way to diversify regional economies." — Assistant Minister Josh Wilson
- NSW Environment Minister Penny Sharpe confirmed the state will register a project for the Great Koala National Park and stated carbon credit revenue would create 100 new jobs
- Dr. Ken Henry said the method could help exit an unsustainable industry
- Timber industry spokesman James Jooste criticized the move as anti-business and potentially harmful to regional communities
- The North East Forest Alliance called it a "gamechanger"
- The Wilderness Society opposed it, arguing offsets allow continued pollution
- Critics including the Bob Brown Foundation and Australian Forest Products Association questioned the method's integrity and additionality
Background
ACCUs are used to meet national emissions targets by polluters under the Safeguard Mechanism and by voluntary buyers. The scheme was strengthened from an earlier proposal that allowed deferring harvest. Scientists had previously questioned the additionality of some carbon farming projects.
These three threads—unaccounted transition funds, interstate log movements contradicting official statements, and a new carbon framework—paint a complex picture of a forestry sector in profound transition, where money, timber, and promises are moving in directions not always aligned with public understanding.