Logging of native forests has cost NSW taxpayers $78 million over the past six years for a declining industry that is also a primary risk for the state's rising number of threatened species, according to a report by The Australia Institute.

The losses have been clocked up by the hardwood unit of the Forestry Corporation of NSW in the six years to the 2014-15 financial year. About 95 per cent of the division's revenue comes from logging in native forests rather than hardwood plantations, the report said.

"In this day and age, native forests can't compete with professionally managed forestry," Roderick Campbell, one of the report's authors, said. The paper was commissioned by the Nature Conservation Council and the National Parks Association on NSW.

The case to end the subsidies is only building over time, with demand for hardwood from native forests falling by an average of 7.4 per cent a year over the past decade while softwood logging volumes had risen an annual 2.9 per cent, said the report.