TL;DR:
Yarram’s mill didn’t close because housing collapsed or because the government failed to hit construction targets. Builders have been going under due to the “profitless boom” created during COVID – fixed-price contracts, soaring costs, and years of financial strain. The industry is still recovering, not shrinking. Meanwhile, the rapid end of native timber and weak transition planning left regional towns exposed. The result is a fragile supply chain where the smallest, most vulnerable mills fall first. If Yarram is to rebuild, the focus must move from tourism projects to real industrial pathways that match the skills and livelihoods of timber workers.
Shock travels fast in a small town. One announcement, seventy-three jobs gone, and suddenly the air feels thinner. People look for someone to blame. The explanations come pre-packaged: construction is collapsing, housing targets are failing, government priorities are wrong.
It’s a comforting story because it’s simple.
But simple stories rarely explain systemic failures.
What happened in Yarram isn’t a morality tale about housing policy or a state budget line. It’s the culmination of deeper shifts we’ve been living through for four years – shifts that have reshaped both construction and timber long before the mill gates closed for the last time.
The truth is more complex:
the mill didn’t close because demand evaporated; it closed because the entire system it relied on has been limping since 2020.
We keep confusing symptoms for causes
The headlines about builders going under make it sound like the housing market suddenly fell off a cliff. It didn’t. The reason so many construction firms failed is much quieter and much older: the profitless boom created during COVID.
Builders signed fixed-price contracts in a period when:
- material costs were unpredictable,
- labour was short,
- supply chains were unstable, and
- every delay turned a profitable job into a loss.
It wasn’t one bad year – it was a structural distortion baked into thousands of contracts. We’re only seeing the collapses now because accounting delays and tax deferrals masked the damage until the system couldn’t carry it anymore.
So yes, construction is under stress.
But it’s not collapsing – it’s decompressing after a period in which the rules made survival nearly impossible.
A stressed system doesn’t meet ambitious targets.
It doesn’t scale.
It tries to heal.
The housing target everyone keeps quoting was never designed to be realistic
The 1.2 million homes over five years became a simple media device:
“240,000 homes per year.”
It looks neat. It fits on a graphic. It gives politicians something to point to.
But capacity never works in a straight line.
You don’t ask an exhausted, undercapitalised, half-injured industry to suddenly operate at peak output. You rebuild slowly. You ramp. You recover trust, workforce, and capital.
The government didn’t publish milestones. So the media invented them.
And the public judged performance against a curve that no serious economist would have endorsed.
This isn’t a matter of political failure – it’s a failure of expectations.
And in the middle of that, regional timber towns were asked to reinvent themselves overnight
Victoria accelerated the end of native timber harvesting years ahead of schedule. The intention was environmental; the impact was economic. And the transition plans – Local Development Strategies – were written with a vision of community vibrancy rather than industrial continuity.
Towns were encouraged toward:
- tourism,
- events,
- placemaking,
- beautification,
- small training programs,
- and lifestyle projects.
All lovely things. None of them capable of replacing industrial wages, supply chains, or the quiet backbone of a timber-based regional economy.
A timber worker cannot simply walk from a sawmill floor into a truffle festival or a cycling trail. A café refurbishment cannot absorb log truck drivers, graders, fitters, or mill maintenance crews. A visitor hub cannot replace a primary industry.
This mismatch was baked into the transition from day one.
Where the transition has worked – and why it still wasn’t enough
To be fair: not everything in the timber transition has failed. Some genuinely impressive, forward-looking work has emerged during this period – work that shows what a future timber economy could look like in Victoria.
But almost all of these successes share one thing in common:
they were driven by industry itself – not by the Local Development Strategy process.
Consider the standouts:
- Radial Timber in Yarram, which has been quietly pioneering plantation hardwood for nearly three decades. Their innovation mindset meant they were already positioned to evolve.
- The Yarram pyrolysis project, which is taking low-grade fibre and turning it into high-value biochar and soil products – one of the most future-oriented uses of regional biomass in the state.
- Australian Sustainable Hardwoods (ASH) in Heyfield, which has leaned into engineered timber, MASSLAM, and advanced manufacturing to build a high-value, high-skill timber future.
- Smaller, promising projects in Powelltown, Longwarry, Benalla, and others exploring plantation utilisation, timber recycling, nurseries, and forestry services.
These aren’t “lucky breaks.” They’re examples of businesses that were:
- strategically positioned,
- innovation-ready,
- experienced in working with plantation fibre,
- or able to pivot toward new product lines and technologies.
In other words, the transition worked best where businesses already had the capability, adaptability, or strategic intent to move toward the next phase of timber.
This isn’t a criticism of others – including AKD. Different parts of the industry play different roles. A mill producing lower-margin products, working within narrower cost structures, or operating further from key markets simply has far less room to manoeuvre during a policy shock.
But it does reveal something important:
The transition didn’t fail because businesses lacked vision.
It struggled because the policy framework assumed communities could diversify their way into replacing a primary industry – when in reality, only industry-driven innovation can generate sufficient jobs, skills, and economic base.
Radial Timber, ASH, and the pyrolysis project show what’s possible. But they are individual success stories – not evidence of a coordinated strategy capable of cushioning towns like Yarram during systemic change.
So why this mill, and why now?
Because fragile systems break at their weakest points.
The AKD Yarram mill sat on the edge of viability. It wasn’t a flagship site; it produced lower-margin products, faced higher operating costs, and sat further from major markets. When the construction sector tightened even slightly – not collapsed, just tightened – the mill became the easiest part of the chain to sever.
A supply chain under pressure doesn’t collapse evenly. It collapses in selective, predictable ways.
The loss here isn’t just jobs.
It’s the erosion of local capacity, community identity, and the secondary businesses that orbit the mill: mechanics, fuel suppliers, drivers, maintenance crews, and small contractors who rely on steady throughput.
We are not looking at a single failure – we are looking at overlapping transitions colliding
When people say “the government failed” or “housing targets weren’t met,” they’re naming the visible symptoms, not the underlying pattern.
The real pattern is this:
- The construction industry has been destabilised since 2020.
- Housing targets assumed a capacity that didn’t exist.
- Native timber ended abruptly, removing the economic floor under whole towns.
- Transition planning focused on community aesthetics, not workforce futures.
- Industrial successes emerged only where businesses were already strong enough to lead.
Put those forces together and Yarram was always going to feel the impact first.
Where do we go from here?
The immediate temptation is to fall into political blame – tunnels, targets, spending, priorities. But none of those levers would have stopped what was already set in motion.
If Yarram wants a future that holds its people rather than hollowing them out, we need a different lens entirely.
We need to move from place-based transition to industry-based transition.
Because the workers who are now unemployed are not categories; they are trades, skills, and careers. They built value for decades. They can build again – but only if the next phase of planning actually revolves around them.
This means investing in:
- plantation timber processing,
- engineered wood,
- pyrolysis and biochar,
- carbon farming,
- forestry-based environmental services,
- restoration and fire management,
- seed and nursery expansion,
- timber recycling and fibre innovation.
Not as side projects.
As the centrepiece.
Yarram doesn’t need a new brand.
It needs a new economy – one that respects and uses the capabilities already here.
The mill closure is not the end of the story.
It’s the moment we decide whether we build a symbolic future or a real one.
And the real one begins with telling the truth about what actually happened.
