The Premier, Lara Giddings, said the State Government is committed to overcoming the challenges confronting the forest industry.

"It is clear that doing nothing is not an option and we are working with the industry and the environmental movement to ensure we can have a sustainable forest industry into the future," Ms Giddings said.

"The Liberals have shown they are only interested in exploiting division and preying on community fear for political gain."

Ms Giddings said Will Hodgman shameless campaign of scaremongering and misinformation over the $35 million set-aside for Forestry Tasmania had been exposed.

"The State Government was very happy to provide the Legislative Council with more information regarding this provision.

"Our position on this funding has been clear and consistent from day one - it is a responsible contingency to support our state owned company through a period of considerable market uncertainty.

"The Legislative Council has shown that it will not be fooled or manipulated by the Opposition and will consider all legislation that comes before it on its merits.

"This is yet another political stunt that has embarrassingly blown up in Mr Hodgman's face."