Not a single tree has been planted more than a year after the Victorian Government pledged $110 million to establish timber plantations in the Latrobe Valley.

The announcement in the 2017 budget followed anxiety within the timber industry over reduced wood supply from the state-owned logging company VicForests and job losses in the region.

But industry figures said there has been no progress and their questions to the Government have gone unanswered.

The local MP for Morwell, Russell Northe, said the lack of detail was extraordinary.

"I think everybody associated with the timber industry is just shrugging their shoulders and shaking their head and thinking what's going on," he said.

"The timber industry is one of the biggest industries in the Latrobe Valley and the Gippsland region. And it needs to be sustainable.

"It's just simply not good enough. It just defies belief and logic that here we are 16 months down the track without any detail about how that money is going to be spent."

The plantations were to be bankrolled by an environmental fund set up to pay for projects that improve sustainability and tackle climate change.

An auditor-general's report found the timber plantation program was one of the highest-value projects to be supported by the fund, but it had not yet been approved.

Six sawmills have called on the Government to adopt a plan to transition to plantation timber. ( ABC News: Stephanie Anderson )

The report said more information was needed to see whether the program met the rules to qualify for funding.

A spokesman for Agriculture Minister, Jaala Pulford, said the Government was taking its time to get the policy right and making sure the money was spent effectively.

"We support a strong, viable and sustainable forest products industry that creates jobs and investment in regional Victoria," he said.

'We need to know where we're going'

While environmentalists have long pushed for a transition to plantation timber, the industry has now joined the call.

Six sawmills from across Victoria who call themselves the G6, or group of six, have called on the Government to introduce a plan for transitioning to plantation timber, as the supply of native forests made available for logging shrinks.

Leonard Fenning from Bairnsdale, in East Gippsland, said the timber industry needed certainty.

Environmentalists say Victoria needs to move away from using native timber. ( ABC News: Stephanie Anderson )

"[We need] to put a solid foot under the industry so that investment will continue to be made and keep up with world standards. We need to know where we're going," he said.

"We're asking to put a platform out for the next 30 or 40 years that will give us security."

He said mills were frustrated at the lack of progress and information on the promised funding for plantation timber.

"That's why we're beating the drum, I guess you'd say," Mr Fenning said.

"We're out there to suggest that they get on with plantations and if we can be of assistance as a group we'd like to see how they'll do that."

Act now, or fall off the cliff later

It is unusual in forestry issues to see the industry and conservationists on the same side, but environment groups have welcomed the G6's push.

Sarah Rees from My Environment said they welcomed the initiatives put forward by the group, but were similarly concerned by government inaction on plantations.

"We would have expected by now, given that money was allocated a year-and-a-half ago, to see a tree in the ground," she said.

"Every year we lose, we lose an opportunity to transition the sector from uncertainty to certainty."

A former logging coupe of the Toolangi State Forest. ( ABC News: Stephanie Anderson )

But environmental research consultant Chris Taylor said switching to plantations was not a blanket tick for sustainability, as they too had management issues.

He said the public needed to be able to scrutinise proposals to establish plantations, as it would be a long-term investment of 30 to 40 years.

Dr Taylor believed that Victoria needed to end agreements that guaranteed native timber supply to the Maryvale Paper mill in the Latrobe Valley, before it could stop logging native forests.

The Victorian Greens have introduced a bill to Parliament to abolish that arrangement.

"We've got two choices — either we take action now and deal with the issue, or we just head to the cliff and just fall off," Dr Taylor said.

"Either way it's going to end, it's how we choose it to transition is the main question."