Stakeholder Update Two - June 2016

In June, The Age reported on a Price Waterhouse Coopers (PwC) report, commissioned by an unknown source, that claimed Victoria’s native forest industry is “costing the economy $5 million dollars a job”.

The analysis appears to ignore the more than $600 million dollars in revenue generated by primary processing of native timber in Victoria, as well as the thousands of associated jobs that are required for processing timber after harvesting and haulage operations.

The PwC report was drafted relying only on publicly available information and no clarification or further detail was sought from VicForests or any timber industry body. The report has not been publically released and the unknown business entity who commissioned it has not come forward.

The PwC report states that the native timber industry is costing Victoria $5 million per job and that VicForests employs only 128 staff. The source of these figures is not referenced but they clearly ignore the hundreds of forest workers and thousands of people employed downstream in processing jobs. By not including the regionally-based mills who process native timber, the analysis overlooks the majority of the employment and economic benefits provided by our industry.

A separate study, conducted by Deloitte Access Economics (DAE), found that VicForests directly employs 281 full time staff and that 2,117 full time staff are employed within the native timber industry in Victoria in the Central Highlands alone.

The DAE study used its Regional General Equilibrium Model  which predicts changes in measures such as GDP, employment, export volumes and investment.

This modelling found the State’s annual Gross Regional Product (GRP) is $357 million higher and there are an additional 2,036 FTE jobs as a result of native timber harvesting across the Central Highlands region.

The report also found that $573 million in revenue was generated by VicForests and its customers in the Central Highlands RFA Area in 2013-14.

DAE’s study is the first fact-based analysis of the economic benefits provided by any part of the native timber industry in Victoria and used conservative assumptions in order to ensure the findings are robust and reliable.

VicForests can confirm that it has remained profitable over the long term while providing social, economic and environmental benefits to the State. 

Our industry continues to provide much needed employment in regional areas and continues to supply sought after high quality timber products that are used every day.

The study by Deloitte Access Economics is available to view on our website here: http://www.vicforests.com.au/about-vicforests/economic-report.