Economic impacts of the New South Wales Rainforest Policy Decision of 1982 on the timber industry of the Far North Coast
1992
Gibbs, D.M.H.
In October 1982, a decision was made by the N.S.W. Government to halt all rainforest logging in the State. Only 19.6 percent of the volume of the timber lost to the industry by the creation of National Parks consisted of brushwood (i.e. rainforest species) timbers, and the hardwood processing industry was significantly affected by this resource loss. After considering multiplier effects, it is likely that total volume of output for the region in 1991 could be more than 24 million dollars 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.
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