The New South Wales government’s 2020 plan to privatise the state’s plantation forests has been delayed by the bushfire crisis.

Labor and the union representing forestry workers — many of whom have been fighting fires — have called for the $1 billion deal to be shelved.

The government commissioned an investigation into the sale of around 230,000 hectares of softwood plantations last year, but the bushfires have incinerated almost 50,000 hectares (20%) of the asset. Around 22 softwood plantations have already burnt, including those at Newnes, Bago, and Green Hill.

The report was expected to return in the first quarter of 2020, but has reportedly been pushed back until the middle of the year, or longer.

The deal would go ahead if it was “deemed to be in the best interests of the people of NSW,” according to a spokesperson for Treasurer Dominic Perrottet.

NSW Labor leader Jodi McKay argued the plan should not go ahead. The softwood “produces enough timber to build a quarter of the new homes in Australia every year” and has employed more than 500 people in regional and rural NSW, she wrote in a letter to Premier Gladys Berejiklian.

“While unprecedented fires have devastated NSW, Forestry Corporation workers have played a crucial role in helping prevent, control and fight fires, establishing containment lines, assisting with back-burning efforts and fighting on the front lines,” the letter said.

“It would be perverse for the NSW government to show its gratitude to these men and women by selling them and their jobs off to the highest bidder.”

The Australian Workers Union has called for “protection not privatisation” of the forest, citing similar reasons.

It said the Forestry Corporation has been a key firefighting agency and must instead be provided with more resources to rebuild forests, and continue to manage and prevent future fires.

“The NSW government needs to go beyond just delaying the sale of our state forests. It needs to ensure this ill-conceived privatisation never goes ahead,” AWU national secretary Daniel Walton said.

“With NSW set to be ablaze for many more weeks to come, and an uncertain future head, it’s essential that we not only maintain the status quo but we provide more resources to our state forestry staff.”

AWU represents around 400 state forestry workers. Many of them have been battling the current fires for months on end across the state, Walton said.

He noted at least two forestry workers have lost their homes.

“We are concerned that any future sell-off could put their jobs at risk as there has never been an incidence of privatisation resulting in more jobs,” he said.

“The skills and knowledge that these workers possess are needed more than ever right now.

“We have a very valuable state-owned asset that contributes $100 million to the NSW economy each year and provides thousands of jobs across regional NSW. We need to ensure that state forests remain in public hands in the future so they can be open for hunters, fishermen and nature enthusiasts and be properly maintained and looked after by a highly skilled and dedicated workforce.”

The state forests produce roughly 14% of Australia’s timber, including much of the supply for the housing industry.