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This is most likely the larvae nest of Maroga, a genus of moths of the Xyloryctidae family. Known as Timber Moth Caterpillars, the larvae of Maroga are common, and graze on the bark of eucalypts under frass-covered webbing. Frass is the fine powdery refuse or fragile perforated wood produced by the activity of boring insects, plus the excrement of insect larvae. The fine silk webbing holds it all together, and acts like a curtain. It falls away in sections if touched. Where the bark of the tree looks like it may have rotted, has actually been gnawed. In the late afternoon light, it was the web shape and yellow colour of gnawed bark against the grey surface bark that drew my attention.
Spotted on the trunk of a native Spotted Gum (Corymbia sp., possibly maculata or citriodora). These seem to be the most popular species of tree for this insect larvae. I have seen other nests on the same species in other locations. This one was at Lake Manchester, a freshwater reservoir to the west of Brisbane. It is located in Brisbane Forest Park, an area of dense native bushland and subtropical rainforest.
Sorry, but I was not prepared to damage the nest in order to ID the caterpillar. It just goes against my principles to damage its little home. 99% of the time, 'look but don't touch' is more than enough. The reference link 'Timber Moth Caterpillars' provides some excellent images of the wood-boring larvae.
Lat: -27.49, Long: 152.76
Spotted on Jul 14, 2018
Submitted on Jul 17, 2018