Australia’s timber industry is set to receive a boost as the Commonwealth Government attempts to bolster long-term domestic supply of important wood products.

The Australian Government has announced that it will provide $86.2 million in grant funding to forestry companies to help fund the establishment of new plantations.

The program will offer matched grants (50/50) to foresters to fund the establishment costs of new plantations in participating states and territories.

The Commonwealth will fund 40 percent of the government contribution to the grants program in each state or territory whilst the participating state or territory will be expected to fund 60 percent of the government contribution.

The grants are expected to be available in the 2022/23 financial year following negotiations with participating states and territories.

The announcement comes as a shortage of timber has emerged amid record levels of detached home building activity, covid-related supply-side restrictions and the loss of timber plantations due in the 2019/20 bushfires.

Whilst the multi-decade nature of the plantation cycle means that the new plantations will not have any short-term impact, the moves are intended to help to underpin long-term wood product supply.

The program also follows a plan launched by the Government in 2018 to increase the nation’s stock of plantation by one billion trees by 2030.

Describing the investment as the largest of any Australian government in the space over the past thirty years, Morrison said the government wanted to build on the nation’s current plantation stock of 1.77 million hectors.

He said getting more trees into the right places will help meet future demand for work products (which on a global scale is expected to quadruple by 2050) and help to grow Australia’s $84 billion farming, fishing and forestry sector.

Timber industry providers welcomed the announcement.

Pointing to its own forecast of the shortage of 250,000 house frames by 2035, Forest and Wood Products Australia said the program would help to secure Australia’s future needs in timber housing construction.

“AFPA has been calling for urgent action by all levels of Government to address our current and future timber supply constraints, which will only worsen as global demand for renewable wood fibre increases if we do not act now to grow our timber plantation resource,” FWPA CEO Ross Hampton said.

“Australia is in the grip of a critical housing timber shortage due to record building activity and imported timber drying up due to global demand. Without action to drive the plantings, the Federal Government’s goal to establish one billion new timber trees by 2030 will not be realised and a looming shortage of 250,000 house frames by 2035 will be imminent.”

But the manufacturing division of the Construction, Forestry, Mining, Maritime and Energy Union (CFMMEU) said the move would establish only 15 percent of the target plantation numbers outlined in the 2018 plan.

The union has called for a comprehensive plan to address barriers to plantation investment.

“This is a huge disappointment particularly as the Government knows that the lack of ambition in the proposal will lock in the timber shortage crisis currently hurting Australia,” CFMEU Manufacturing National Secretary Michael O’Connor said.