FORESTRY Tasmania has predicted the value of the state's native forestry industry will increase by up to $700 million if the forestry peace deal is implemented.
In its submission to the Legislative Council's inquiry into the proposed legislation to enact the agreement, Forestry Tasmania offers a conditional endorsement.
The state-owned public forest manager warns that the reduced wood production forests will test its short-term viability and it will need ongoing financial support.
However, in the long term Forestry Tasmania estimates the agreement, which guarantees wood supply of 137,000 cubic metres a year, could boost the gross value of production to $220 million a year, compared with last financial year's result of $156 million.
Over 15 years, Forestry Tasmania calculates the extra revenue generated by implementing the deal rather than doing nothing at $700 million.
The figures are dependent on the deal being accompanied by measures to support the development of new types of wood products. Without that, the financial benefit is reduced to $100 million a year.
Liberal forestry spokesman Peter Gutwein said the submission revealed the agreement would slash the industry's value by $2.2 billion over 15 years based on the comparison with an industry using the previously guaranteed minimum supply of 300,000 cubic metres.
However, Forestry Tasmania said that was no longer a relevant starting pont.
"This premise is based on the one hand on Gunns Limited's demise and on the other hand on declining market demand evident in the immediate past," Forestry Tasmania's submission stated.
A socio-economic study is being conducted by the federal government and is expected to be finalised by the end of the month.