The NSW government is considering privatising its commercial softwood business, providing it doesn't cost any jobs in the regions.
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The state-owned Forestry Corporation has about 230,000 hectares of radiata pine forests that primarily produces timber for use in housing construction.
Treasurer Dominic Perrottet has asked for more information about the viability of a long-term lease of the profitable business and whether it is in the state's best interest.
"Commercial operations are often better left to the private sector, but we'll wait for the outcome of a scoping study before making any decisions," he said in a statement on Thursday.
"NSW is the only state left in Australia still running a softwood plantation of significant scale, so it's appropriate we take stock as a state and explore whether this is still the best approach for us."
Deputy Premier John Barilaro said any lease would only proceed on the basis that it posed no risk to regional jobs.
"We support the decision to assess our options on the softwood business, but want to reassure those people working in the plantations, they will not be left out in the cold," he said.
Australian Associated Press