Media Statement

27 January 2004

Commodity levy worth considering

The forestry industry should think carefully before rejecting out of hand the proposal to have a commodity levy, Forestry Minister Jim Sutton said today.

Mr Sutton told the southern North Island branch of the New Zealand Institute of Forestry in Wellington that right now the forest industry had its best chance in years to secure a commodity levy to fund its industry-good activities.

"I urge the forest sector to set aside whatever prejudices it might have about levies, to think about where it wants to go, to understand the reality that making progress means making investments, and to appreciate that increasingly public funds will only be available if they are complemented by private funds. Once you have done this ? then consider where you all stand on a commodity levy."

Mr Sutton said the forestry industry had a goal of overtaking the dairy industry as New Zealand's biggest exporter, and the funding of industry-good activities through a commodity levy could be an important part of achieving that goal.

He said a commodity levy under the Commodity Levies Act must be voted on every five to six years, and levypayers must be provided with audited accounts annually.

"That provides very clear accountability to levy payers that their money is being spent to their best advantage."

Mr Sutton said the forestry sector faced many challenges.

"Underlying all of them is the essential truth that the forestry sector (forest growing and wood processing) must be profitable at every level if we are to have a sustainable and growing industry. This means it must be internationally competitive. "

The Government and industry are working together to ensure this, notably through the Forest Industry Framework Agreement and the Wood Processing Strategy, he said.

Mr Sutton leaves on Sunday to lead a two-week long forestry trade mission to South Korea, China, and India, all key markets for wood products.

He said the purpose of the trade mission was to further increase knowledge of the versatility and capability of the wood processing industries in New Zealand.

"In particular, we would like discussions to lead to partnerships between New Zealand forest industry companies and businesses involved in the trade mission, and Asian users of forest products.

"This is the most senior group of forestry representatives ever to travel overseas together and reflects the importance we in New Zealand attach to building our relationship with these key markets which, between them, take about 40% of New Zealand's exports of forestry products."

Mr Sutton said there was enormous potential for increasing lumber exports to China, now that New Zealand radiata pine was included in the new Chinese building code, as confirmed by Chinese president Hu during his visit here last October.

"The mission will assist in raising Chinese awareness of the good structural uses of radiata."

Mr Sutton returns to New Zealand on February 15.

ENDS

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