In Orbost, in East Gippsland, the closure did not arrive as a single mill gate shutting — it arrived as a letter, then a meeting, then months of waiting for redeployment offers that did not come. In the days after the Victorian Government's May 2023 announcement, around 110 forestry workers in the town found themselves in limbo, close to a fifth of Orbost's entire workforce dependent on an industry the state had, only seven months earlier, been telling them would run until 2030 (The New Daily, "Shock and fear grip Victoria's timber towns after logging ban," 27-May-2023). Some found redeployment on fuel-break and bushfire-recovery contracts; others took retraining vouchers into trades they had never worked in; others left town. Multiply that scene across Heyfield, Bairnsdale, Myrtleford and the Alpine hardwood belt of Victoria's north-east, and the shape of the policy comes into view: an industry that had worked these forests for more than a century, closed inside a single parliamentary term.
What the government did
Victoria's native-timber industry harvests sawlogs and pulpwood from state-owned public forests — mostly in the Central Highlands, Gippsland and the state's north-east — through VicForests, a state-owned enterprise that sells timber to sawmills and paper mills under long-term supply agreements. In November 2019 the Andrews government's Victorian Forestry Plan set a 30-year timetable: native-forest logging would be phased down and end entirely by 2030, old-growth logging would stop immediately (protecting about 90,000 hectares), a further 96,000 hectares would be reserved under a Great Glider Action Statement, and $120 million would fund the retraining and redeployment of an estimated 1,000 forest-industry workers (Premier of Victoria, "Bolstering the Victorian Forestry Plan," media release, 07-Nov-2019).
On 23 May 2023, Premier Daniel Andrews — joined by ministers Gayle Tierney and Harriet Shing — announced the government would bring that end date forward six years, to 1 January 2024. The 2023–24 Budget carried $200 million in new transition funding, which the government said took its cumulative support for the forestry transition to more than $875 million, covering worker payments, sawmill exit and voluntary-transition packages, a Forestry Transition Fund offering grants of up to $1 million to new regional businesses, and up to $8,000 in Free TAFE retraining vouchers per worker (Premier of Victoria, "Delivering Certainty for Timber Workers," media release, 23-May-2023). Commercial native-timber harvesting on Victorian public land ended on 1 January 2024, a little over seven months after the announcement. Jacinta Allan became Premier on 27 September 2023 and has overseen the transition program's implementation, and answered for its results, ever since.
The strongest case
The courts had already found VicForests was breaking the law, and taxpayers were subsidising the losses
Put the government's case at its strongest, and native-timber logging in Victoria did not end because of a political preference for forests over jobs — it ended because the industry, as VicForests was running it, had become both legally untenable and financially indefensible. In May 2020 the Federal Court, in a 359-page judgment covering 66 coupes across the Central Highlands, found VicForests had not been complying with the Code of Practice for Timber Production, and that its logging had had, and was likely to keep having, a significant impact on the endangered Leadbeater's possum and greater glider — an offence under Commonwealth environment law (Federal Court of Australia, Friends of Leadbeater's Possum Inc v VicForests (No 4) [2020] FCA 704, 27-May-2020). The Supreme Court of Victoria went further in separate cases brought by Kinglake Friends of the Forest and Environment East Gippsland, ruling for the first time that VicForests was logging illegally because its pre-harvest surveys had failed to properly locate greater gliders and yellow-bellied gliders before coupes were cleared. In July 2022 the Commonwealth listed the greater glider itself as endangered, tightening the protection VicForests was legally required to deliver in exactly the forests it was still scheduled to log for another eight years.
The commercial case was no stronger. VicForests had not turned a reliable profit for years, recording an operating loss of $54.2 million on $88.4 million of sales in 2021–22; in its final full year, 2022–23, it planned to harvest $112 million worth of timber but delivered only $17.9 million, paying $110 million in compensation to customers it could not supply — funded by a $149 million payment from the state — for a net loss of about $60 million (approx.) (VicForests, Annual Report 2022–23, tabled Parliament of Victoria, Oct-2023). A government facing a state-owned business that courts kept finding was breaking environmental law, and that taxpayers were subsidising more heavily each year, has a genuine argument that running the industry on to 2030 was not a neutral, cost-free choice — and the $875 million package is, on any measure, the largest regional-industry transition Victoria has funded, roughly seven times the size of the 2019 commitment it replaced.
The evidence
The scale of both the closure and the response shows up in the government's own figures. VicForests' native-timber harvesting rights were written down to zero on its balance sheet once the government fixed the 1 January 2024 end date, and its revenue collapsed as coupes were tied up in litigation through 2022–23 before winding down entirely (VicForests, Annual Report 2022–23, Oct-2023). On the transition side, the government's own figures put the number of regional jobs affected at up to 4,000 (approx.), concentrated in Gippsland, with further losses across the north-east's Alpine and Upper Murray hardwood belt around Myrtleford and Benalla (Victorian Auditor-General's Office, Supporting the Transition from Native Timber Harvesting, tabled 01-Apr-2026, background section). The transition package itself grew substantially over time — from $120 million committed in 2019, to more than $875 million announced in May 2023, to a cumulative figure trade press covering the program's 2026 wind-down put at over $1.5 billion (approx.), once compensation paid to timber customers and plantation investment are counted in (Wood Central, "Timber Towns Count the Cost as Victoria's $1.5B Transition Winds Up," 2026).
The critique
The government is entitled to say the industry it inherited was not sustainable. It is much harder to defend the speed of what replaced the 2019 promise. Workers, contractors and whole towns spent three and a half years planning around a firm 2030 end date, with supply agreements running to 2024 as a bridging period — then, on 23 May 2023, were told the entire industry would close on 1 January 2024, a little over seven months later. A thirty-year plan became a seven-month notice period. Nothing about the FCA 704 judgment, delivered three years earlier in May 2020, or VicForests' accumulating losses required the closure to happen in months rather than years; the speed was a political choice made once the government's own commercial and legal risk calculus caught up with reality, and Gippsland and north-east communities absorbed the compressed timeline that resulted.
The transition program's own outcomes, as measured by the state's independent auditor, do not support the claim that a big-dollar package by itself delivers a soft landing. The Victorian Auditor-General's Office found the Department of Energy, Environment and Climate Action could not demonstrate that displaced workers were better off: of a sample of 32 workers reported as placed in new jobs, only eight had documentary evidence — a job offer, a payslip — to support the claim, and the department's own dashboards tracked participation and payments made, not whether jobs were sustained. Among the workers the program did track, the share in full-time employment fell from around 80 per cent before the closure to around 60 per cent afterwards — a meaningful slice of "transitioned" workers moved from secure, full-time forestry work into casual or contract work rather than an equivalent job. The Auditor-General also could not gain assurance over more than $1.61 million in worker and business support payments — about 2 per cent of the sample checked — and found only 68 per cent of business grants had documented pre-payment checks (Victorian Auditor-General's Office, Supporting the Transition from Native Timber Harvesting, tabled 01-Apr-2026). The department accepted all four of the Auditor-General's recommendations, a genuine point in its favour — but it means the state spent more than $875 million, and on some trade-press accounts over $1.5 billion (approx.), for close to three years before its own auditor could confirm whether the program was working.
The town-level evidence matches the audit's caution. In Orbost, around 110 forestry workers — close to a fifth of the town's workforce — were left waiting for redeployment in the months after the May 2023 announcement, and later reporting put the town's total job losses from the ban as high as a quarter of its employment base (approx.) (The New Daily, 27-May-2023; Wood Central, 2026). The closure of Heyfield's Australian Sustainable Hardwoods mill and disruption at Opal's Maryvale paper mill rippled beyond direct timber jobs into the tyre-service operators who kept log trucks running, the engineers who maintained harvesting machinery, and forestry contractors who retrained as truck and forklift drivers only to compete with each other for a shrunken pool of jobs — flow-on effects the government's per-worker payments and retraining vouchers were not designed to fully capture. Some of the government's own political allies have questioned how cleanly the money reached workers, too: the Victorian Greens publicly called on the Auditor-General to examine the $875 million package following allegations of rorts in how payouts were administered — a claim the government disputes, but one that adds to the picture that speed of delivery, not just size of the package, is what regional communities actually experienced.
The timber-supply consequence is structural rather than a one-off shock. Victoria's construction sector has lost its only domestic source of native hardwood — used for flooring, decking, power and telecommunications poles, and appearance-grade building products — at the same time the state government is pursuing an ambitious home-building target under its own Housing Statement. Plantation softwood and imported hardwood are the substitutes on offer, but they are different products with different costs, lead times and end-uses, not a like-for-like replacement — a gap industry bodies flagged well before the 2024 cutoff, and one the transition package's business and innovation grants were explicitly designed, but not yet proven, to close.
A ten-year phase-out promised in 2019 became seven months' notice in 2023 — and it took until 2026 for the state's own auditor to admit it could not say whether the workers displaced were better off.
The risk to the future
A template for closing an industry faster than a region can absorb it
The precedent this decision sets matters beyond forestry. Victoria has shown it can end a century-old regional industry on seven months' notice, commit close to a billion dollars to cushion the impact, and still have its own Auditor-General find — nearly three years after the mills stopped, with the audit not tabled until April 2026 — that it could not verify whether displaced workers were actually better off. If a similar approach is applied to the state's next large industrial transition, most obviously the scheduled closure of Latrobe Valley coal generation later this decade, the gap between announcing generous transition funding and proving it worked is a risk regional Victoria will be asked to absorb again, potentially on a larger scale and with no more warning than the 2030 timetable this policy itself abandoned.
The timber-supply gap is also unresolved. Without a demonstrated, evidence-backed replacement economy in Gippsland and the north-east — the kind the Auditor-General says the department cannot yet show exists — and without a substitute domestic hardwood supply for the construction sector, Victoria risks carrying two unfinished problems at once: regional communities whose replacement jobs have not been proven to have arrived, and a housing-construction sector leaning harder on imported and plantation timber precisely as the state tries to build homes faster than it ever has. Whether the $875 million-plus spent so far becomes a genuine transition or simply the price of an accelerated closure is a question the primary record, as things stand, cannot yet answer.