A looming timber "crisis" threatens to delay the supply of new homes.
Builders have been crying out about supply shortages for more than a year and now a NSW parliamentary committee has spelled it out in black and white.
"The demand for timber and forest products is growing and cannot be met with existing supply," committee chair Mark Banasiak said in the report.
The Shooters, Fishers and Farmers MP said a lack of vision from successive governments had left the timber industry exposed.
The committee heard mixed opinions during public hearings but one thing became clear.
"We are heading towards a timber supply crisis in NSW," Mr Banasiak said.
The Black Summer bushfires wiped out native hardwood plantations and the pandemic also impacted supply, but he said these were not the main contributors to the crisis.
"The timber and forest product industry has suffered from a lack of longer-term vision over successive governments to address supply issues, industry needs and community expectations.
"The impact of this cannot be overstated."
Mr Banasiak said urgent action was desperately needed and encouraged the government to read the report's 24 recommendations.
The report found the demand for forestry products was growing and could not be be met with existing supply. It also found there had been no increase in additional plantations over the past decade.
The Nature Conservation Council supported one recommendation to expand timber plantations, so long as they did not encroach on native forests or productive farms.
Chief executive Jacqui Mumford said transitioning from native forestry to plantation logging would be a win for nature and industry.
"The need to protect native forests from industrial logging has never been greater, with koalas and many other forest species sliding towards extinction," she said.
Independent MP Justin Field, who sat on the committee, objected to one key finding in the report, which related to the proposed Great Koala National Park.
Mr Field said now was time to establish the 315,000 hectare reserve near Coffs Harbour and protects its trees, which are some of the most valuable koala habitat in NSW.
However, the majority of the committee found an economic and environmental impact report prepared for the National Parks Association contained significant deficiencies and could not be relied upon.
The committee recommended the government pump the brakes on the park until an "independent and comprehensive" study was conducted.
It also found changing forest areas to protect trees rather than harvest them had been done with little consideration about the loss of supply.
It said the government should do more to capitalise on the "untapped potential for innovation in the timber and forest products industry".
The government has three months to respond to the report.
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