Forestry Minister David Carter insists forest plantings will continue to increase despite a reduction in funding.
Budget documents reveal funding for the Afforestation Grants Scheme will be cut by $2 million a year, and it will be wound up a year early.
The papers say the changes will mean fewer trees are planted and regional councils, which are eligible for half the money, may be unhappy with the changes.
Mr Carter says his priority for the May Budget was how to make the best use of taxpayers' money.
He says he's confident the Emissions Trading Scheme will deliver the increased forest planting the country needs, despite the funding cut.