Rt Hon Winston Peters
New Zealand First Leader
Member of Parliament for Northland
29 August 2017

NZ First Has Vision to Revitalise And Future-Proof Forestry

New Zealand First has a vision for our forestry industry and its future – the government has none.

Having a vision is critically important for New Zealand because forestry is our third biggest export earner behind dairy and meat.

However, New Zealand First is deeply concerned at issues facing the industry and particularly the excessive harvesting that is going on.

We believe there is insufficient planning for the future.

We want to ensure continuity of supply for both the domestic and export industries.

We want to ensure jobs are kept here in Northland and other regions and that they increase in numbers.

We don’t want all the add-on value of our raw logs being lost overseas.

We want that add-on value maximised here in New Zealand.

Bill to boost forestry sector

Last year at the NZ Institute of Forestry Conference in Dunedin we announced that we would introducing a Bill to boost the forestry sector.

At the heart of this was a pledge to introduce legislation to reinstate the New Zealand Forestry Service.

That is something we lodged this May as the Forests (New Zealand Forestry Service) Amendment Bill. This was a private members bill with the following objectives:

1. To re-establish the Crown’s direct ability to create state forests on Crown land and on private land with the co-operation of landowners. This is about stabilising marginal land, reversing the loss of tree cover and to create jobs.

2. To stop serious deforestation which is occurring right now with immature trees being felled and sent to the ports.

3. To ensure New Zealand benefits and not foreign countries.

4. To make any foreign investment into forest land subject to the Overseas Investment Act.

This Bill is a commitment to your industry nationwide and to Northland.

Northland has over 150,000 hectares of production forest area - the third largest standing volume and the fifth largest area in New Zealand.

It employs well over 2,000 Northlanders so is highly important to us.

We believe it could be double that and more but not on this government’s ‘flog it off no questions asked’ approach.

Securing domestic supply

You, more than anyone else, will be aware that we are cutting down immature trees, putting them on trucks and then waving goodbye to the logs as they sail for China.

We decided on the Canadian model with one very important difference.

Canadian forestry is predominantly publicly owned through provincial governments and is subject to WTO unfriendly subsidies.

Here, forestry is predominantly private including iwi and is unsubsidised.

So our approach is similar to quota management from fishing:

It starts with knowing what forestry resource we have by establishing Forest Management Units;

It requires holders of these units to enter into sustainable forestry agreements that controls everything from harvest to replanting. It ensures waterways aren’t filled with sediment and makes sure health and safety is paramount. This is about being planned; and

We envisage Annual Allowable Cuts under quota to avoid depletion of plantation forestry bookended with Timer Licenses at the time of harvest. This includes make good and reforestation provisions.

As with fisheries, this is overlaying a management system to create sustainability.

Sustainability allows for long-term planning and investment in processing.

The $300m Ngawha Pulp Plant loss was as a result of depletion and swinging power price increases from the Transmission Pricing Methodology.

We must not allow that to happen again.

Incentives to ramp up exotic forestry planting

At this time of the year demand is flat and in August, the PF Olsen Log Price Index is $125 per tonne; $13 per tonne above the three year average.

We must have a strange construction boom when demand for building materials is so flat.

Another factor at play is the high Kiwi dollar.

That is suppressing demand and makes us less competitive.

In other words, the needs of 72,400 new migrants net every year and an import obsessed economy are impacting our exporters, forestry included.

This is why NZ First’s Singaporean-style reform of Monetary Policy is needed.

The best way to ramp up plantings stems from greater returns.

It is as basic as that.

That is why we will split forestry from MPI to recreate the NZ Forestry Service as a doing department.

One that can advise, plan and manage state forests on private and iwi land in partnership with landowners.

Reinforced by a legislative requirement for reforestation and this department driving afforestation, we can turn a problem with less productive and leaky soils into opportunity.

Having a standalone department is vital for fighting biosecurity incursions as opposed to MPI’s default setting.

1.4 billion reasons why climate change policies aren’t working for forestry

The idea of taking $1.4bn off Kiwis and washing it through some convoluted scheme to improve the climate was never going to work for domestic forestry. Never.

New Zealand First arrived at the UK-Norway approach to this most important of challenges six years ago.

That is we take responsibility for our emissions and we spend money here not overseas.

That’s ultimately what carbon taxes or ETS do.

‘So here is the New Zealand First approach to climate change:

NZ First will exit the Emissions Trading Scheme and replace it with a UK-style Climate Change Act (the UK policy is in serious accord with Norway’s policy, that is, that both populations will clean their own act up).

Here is the best aspect for forestry nationally and locally. Savings from no longer having to buy $1.4bn worth of emission units every year $14bn over the next ten years, will be redirected into applied research and development and adapting to climate change. That includes tree planting on state and private land.

Integral to this new Climate Change Act will be a new Parliamentary Commission for Climate Change, or PCCC, to be established as an Office of Parliament;

The Parliamentary Commission for Climate Change will be legally responsible for reporting against both the Kyoto and Paris Agreements. It will work with the government to set a three-yearly ‘Carbon Budget’ designed to reach these commitments such as forestry;

The first such ‘Carbon Budget’ will become operative in 2021 with the Parliamentary Commission for Climate Change providing independent advice to central and local government on how they can meet carbon budgets and how to prepare for climate change. It will also conduct independent analysis into climate change science, economics and policy;

The Parliamentary Commission for Climate Change will be funded from current administrative costs for the Emissions Trading Scheme meaning it is cost neutral;

Controlling the export of raw logs

We do not plan to tax raw logs being exported but we can put restrictions on their export by making exporters apply for permits on a year-by-year basis.

We can become amazingly bureaucratic when it comes to exports that have no added value.

That is a loss to the national economy and Northland.

Conversely we do have policies we are close to announcing that will massively incentivise value-add processing being done here in Northland.

It is geographic specific and highly innovative but you will have to wait to see it.

Foreign ownership

Over two-thirds of plantation forestry is foreign owned.

Foreigners have snapped up 362,000 hectares of freehold farm or forestry land.

That we allow this is crazy.

NZ First, in government, will seriously tighten up the ability of foreigners to buy our land. We have to if we are to put New Zealand and New Zealanders first.

ENDS

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