Economic impacts of the New South Wales Rainforest Policy Decision of 1982 on the timber industry of the Far North Coast

Summary

In October 1982, a decision was made by the N.S.W. Government to halt all rainforest logging in the State. This decision resulted in the revocation of 119, 953 ha. of State Forest and related lands, to create National Parks and Nature Reserves. On the Far North Coast of N.S.W., 62,866 ha. were included in the Border Ranges National Park, Nightcap National Park and Washpool National Park.

Only 19.6% of the volume of timber lost to the industry by the creation of these National Parks consisted of brushwood (i.e., rainforest species) timbers, and the hardwood processing industry was significantly affected by this resource loss. Total sales of sawlogs to the industry in this region were nearly 85,000 m³ lower in 1991 than in 1980/81, with hardwood log sales dropping by 55,000 m³. Using 1991 prices, the resulting loss in annual output from the industry (gross sales) is estimated to be at least $11 million, with up to 600 timber-related jobs being lost. After considering multiplier effects, it is likely that total volume of output for the region in 1991 could be more than $24 million lower than it was in 1980/81 (in real price terms) and regional employment could have declined by over 1,300 jobs.

A large share of this observed contraction in the timber industry has been as a direct result of the Rainforest Decision, and real economic wealth has been lost from the region as a consequence. These outcomes for the regional community are contrasted with predictions and commitments made at the time that the policy decision was taken. Based on this case study of regional timber industry experience, it is suggested that the political process may not be the most effective mechanism for allocating resources, if regional community welfare is to be enhanced.