South East Timber Association (SETA), Media Release, 14 November 2022
An independent review of an Australian National University (ANU) report advocating for the closure of native forest harvesting in southern NSW, has confirmed the report is deeply flawed. The ANU report must not be relied on by government decision makers.
The report, “Comparing-the-value-of-alternative-uses-of-native-forest-in-southern-nsw,” was released by the ANU and promoted by law professor Andrew Macintosh and Danny Price, managing director of Frontier Economics, on 30 November 2021.
South East Timber Association (SETA) secretary, Peter Rutherford said “this week, a review of the ANU cost-benefit analysis, commissioned by SETA, confirmed the ANU/Macintosh report had a number of serious flaws. These flaws were glossed over, whenever the report “findings” have been presented to government, the media and general public.”
The ANU report claims, “when compared in today’s dollars, the incremental benefits of ceasing native forest harvesting are higher than the incremental costs by $61.96 million.”
The analysis commissioned by SETA has found “The cost-benefit analysis contains errors that, when corrected, increase the present value of the forestry scenario in southern New South Wales by about $300 million.”
Mr Rutherford stated “the flaws identified in the report totally undermine the alleged economic benefits of closing the native forest industry in southern NSW. Rather than a net present value (NPV) of $61.96 million over 30 years, closure of the industry would result in a negative NPV of -$252.43 million.”
“In reality, the economic impacts are even more devastating for rural communities.”
The review has been undertaken by Dr Tyron Venn, Senior Lecturer in Agri Resource Economics at the University of Queensland.
Dr Venn’s review noted “the net present value (NPV) and benefit to cost ratio (B/C) investment criteria need to be interpreted cautiously when there are large differences in the scales of projects being evaluated.”
“An adaptation of the data used by Frontier Economics and Macintosh (2021) highlights the likely changes in production and employment for the Southern and Eden RFA regions of New South Wales arising from replacing forestry with mountain biking.”
“Relative to continuation of forestry in the region, the gross value of production will fall by about 99 per cent ($99 million per year), and direct employment will fall by about 80 per cent (240 jobs) if the forests are managed for strict conservation and mountain biking instead.”
“Condensing the analysis into a NPV hid the enormity of these differences, and the extent to which carbon value is relied on for the mountain bike recreation scenario to surpass forestry.”
ANU carbon whistle-blower, law Professor Andrew Macintosh, continues to defend a flawed economic report with a cone of silence.
It is almost a year since a report advocating for the closure of the native forest industry in southern NSW was released. The South East Timber Association (SETA) has repeatedly called on law Professor Macintosh and Deirdre Rose of Frontier Economics, to explain how their economic assessment can be regarded as properly researched, when it contains so many fundamental flaws.
“Documents obtained under Freedom of Information (FOI) have revealed that Professor Macintosh, was the Agreement Manager, with responsibility for supervision of the Agreement on behalf of the ANU,” says Mr Rutherford.
“Ms Rose, was responsible under the research services agreement for ensuring standards to the satisfaction of the ANU agreement manager were met.”
“Despite Professor Macintosh initially being advised of some of the more serious flaws in the report on 9 December 2021, he continues to refuse to respond.”
“In June 2022, SETA attempted to get a response from Ms Rose to a series of questions relating to the report findings,” Mr Rutherford commented.
“Emails and phone calls to ANU Chancellor Bishop’s office have also failed to elicit a response. ANU and Frontier Economics staff, have stoutly defended their spurious findings with a steely cone of silence,” he said.
“The FOI process, which commenced in late December 2021 has also been frustrating at times. One key finding was, the funding for the ANU to pay for the report amounted to just over $80,000. The funding of 44,000 GB pounds, has come from an anonymous donor in the UK,” Mr Rutherford advised.
Mr Rutherford said that “despite the donor agreeing to be publicly acknowledged for the donation, the ANU has chosen to keep their identity secret. This secrecy begs the question as whether there are ulterior motives behind the donation.”
“SETA is also curious to know why the donor would choose to have a law professor lead the production of an economic report, rather than economic experts from the ANU Research School of Economics.”
Mr Rutherford went on to say, “coincidently, last week, WWF Australia have released a Frontier Economics report, advocating for the closure of the whole of the NSW native forest industry.”
“SETA has simple advice to any politician or decision maker, who think they should use the report. Don’t!”
“For too long, all tiers of government in Australia have accepted eco-political nonsense, instead of seeking truly expert and independent advice, when developing native forest related policy.”
The full review by Dy Tyron Venn is available here.
Australian Rural & Regional News welcomes and will seek a response to this article from Professor Andrew Macintosh and Frontier Economics.
