By Jae Lubberink (Blueprint Institute Researcher)
Last week in the AFR, reports emerged of former Senator Eric Abetz, followed by Opposition Leader Peter Dutton, decrying the ‘woke bankers’ at Bendigo and Adelaide Bank for refusing to lend to creditworthy native logging businesses. It was a call to arms to the anti-woke brigade straight from the Trumpian playbook.
But as Dutton continues to quietly capitalise on the brooding disaffection for 'wokeness', he is running out of straws to clutch at.
Why does the Coalition—the supposed party of the free-market—believe they have the right to dictate the lending decisions of regional banks? As private enterprises, banks issue loans based on comprehensive risk assessments that extend well beyond basic creditworthiness. Environmental risks, industry sustainability, and long-term viability are all legitimate considerations in their commercial judgement.
While regulated by APRA and bound by their corporate obligations, banks retain private autonomy in their lending decisions. Declining finance—whether based on environmental concerns or other risk assessments—is squarely within their purview as prudent commercial entities. Surely our highest Senior officials understand that creditworthiness is a necessary, but not a sufficient condition to accessing finance. Political persuasion does not, and should not, influence these judgements.
Strong-arming banks into politically-convenient lending decisions is not only a hypocritical departure from the Coalition’s typical free-market economic orthodoxy, but it also overlooks the structural decline of the industry.
At Blueprint Institute, we’ve shown that the native timber logging industry is no longer economically viable—surviving only through heavy government subsidies. In Tasmania, our economic modelling found that if Sustainable Timber Tasmania (STT) ceased native logging operations in this financial year instead of 2049, repurposing the land for carbon sequestration would yield a net benefit of $72 million.
Prolonging the taxpayer-funded destruction of our natural assets to appease the demands of a romanticised, archaic industry is not only a blatant misuse of taxpayer funds, but senseless environmental self-harm and economic insanity of the highest order.
At Tasmania Legislative Council Estimates in September last year, Abetz himself acknowledged that STT had failed to meet the annual supply quota for high-quality sawlogs—a trend that STT themselves concede is likely to continue.
I’m not a qualified credit specialist, but I’d wager that long-term lending to an industry in terminal decline might contravene a business viability risk threshold, even if current performance is technically creditworthy. This is before we get into any of the so-called ‘woke’ environmental nonsense.
The mistruths about the native timber industry permeate beyond the balance sheet. Today, over 90% of the logs harvested come from plantation forests. Australian homes are made from plantation pine, not native timber. Moreover, a large proportion of Australian native timber is exported as low value woodchips to global markets with waning demand.
This is not radical extremist ideology—it's reality. Our research has shown this for regions in Victoria, NSW, and Tasmania. Victoria and Western Australia have already legislated the end of native logging in their states.
Australia’s old-growth forests are vital reservoirs of biodiversity and are among the most effective natural carbon sinks. While old-growth forests make up only a small fraction of Australia’s forests, aged regrowth remains vital for climate stability and biodiversity conservation. Australia is both a deforestation hotspot and a global leader of species extinction. Native forest logging exacerbates this crisis, as many of our threatened species rely on prospective logging areas as critical habitat.
This is not just about nature loss. Climate change and the heightened risk of bushfires mean the likelihood of new forests reaching old age is rapidly diminishing. As the clean energy transition continues to face headwinds, we can’t afford to lose the natural carbon sinks we do have. We should be protecting all the native forest we can.
While Dutton’s remarks may amount to little more than strategic dog-whistling, they shed light on a much bigger political mess in Australia’s forestry sector, due to government inaction.
Bendigo and Adelaide Bank’s environmental leadership deserves plaudits. However, it is the government—not private enterprises—that should lead the charge to phase out native forest logging. Leaving policy signals to the corporate sector invites all sorts of headaches—and family businesses are already getting caught in the crossfire.
Tasmania should follow the example set by Victoria and Western Australia by legislating an end to native timber logging. Both state and federal governments must explore all sensible measures to transition the remainder of the native forest industry. All of our analyses include generous transition packages to ensure a fair and equitable exit for affected communities.
And if Dutton is determined to aggravate a populist base ahead of the election, there are many more ‘woke’ issues deserving of his attention than the lending practices of private banks who are picking up the slack from his own side of the fence.
Jae Lubberink is a Researcher at Blueprint Institute—an independent public policy research institute. Contact Jae at: [email protected]
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