Economics
VicForests was established with a charter to return a profit to the people of Victoria. Unfortunately for Victorians we lose a lot but gain very little. Investigations by The Age newspaper revealed that in 2007, VicForests made a $17,000 loss. Last year, VicForests claimed it made a profit, but this was only after receiving a $5.7 million handout from tax payers.
So who does make money from this?
By far the majority of the forest logged ends up as woodchips which are sold to three companies, Australian Paper, Midway and South East Fibre Exports. All of these companies are owned by or sell their wood to Japanese paper giant Nippon Paper.
They make a profit because they do not pay the market value for the logs. The Sunday Age revealed that VicForests sells a tonne of wood to Midway woodchip company for $2.50. Compare this with the approximately $36 Midway would have to pay if buying from a plantation grower.
VicForests does not account for the lost value of water, carbon and biodiversity, estimated to be in the hundreds of millions of dollars per year.
In short, VicForests is acting as a subsidised middleman by selling our forests for much less than they are worth, mainly to paper and woodchip companies.
MYTH - Native forests are logged primarily for sawn timber with wood chips as a by-product.
TRUTH - 85% of Victoria’s native forests ends up ad woodchip, waste and sawdust - Read the Age article. The majority of this goes to Japanese owned Nippon Paper, mainly under the provisions of the Wood Pulp Agreement Act 1996.
