Forestry shift to value key: Cunliffe

00:00, Mar 21 2014

Selling logs overseas by the shipload is akin to exporting jobs and Labour wants a shift from "volume to value", says party leader David Cunliffe.

Labour's forestry policy package announced this week was a specific sector example of the party's economic development framework that would benefit regions like Nelson, he said.

"It's about a journey from volume to value in our primary sectors, and it's about the investment, innovation and industry development to get us there."

Mr Cunliffe unveiled the policies at the Forestwood Conference 2014 in Wellington on Wednesday.

He told the Nelson Mail the policies had been well received by the industry, partly because they came from a long dialogue and were well aligned with ideas developed by the Forest Industry Association.

The three main forestry policy thrusts were tax deferrals to encourage investment in technology and plant, tax credits for research and development, and a pro-wood government procurement strategy for buildings up to four storeys high.


"In forestry there's a problem that we're trying to solve, and that is that half of our trees are being sold as raw logs, and just going offshore.

"That is pretty much the same thing as exporting jobs."

Much of New Zealand's forest resource is in the hands of giant multinationals such as Boston-based Hancock, which has extensive Nelson plantations.

Mr Cunliffe said there often wasn't "a lot of connection" between these big groups and the domestic processing sector, "so it's pretty much the same to them who they sell to".

"That's a different question from the question of how we increase the net return to New Zealand, and the answer to that is obvious: the more production and processing and advanced manufacturing we can do in New Zealand, the more value that we create onshore and will keep onshore."

The huge Japanese-owned Nelson Pine Industries MDF and laminated veneer lumber factory in Richmond was a good example of high-quality foreign investment which added value to timber, created jobs and developed technology. "We welcome that," Mr Cunliffe said. "The MDFs of tomorrow might well be laminates, and the value of a laminate per cubic metre is roughly 10 times that of a raw log."

The timber industry was cyclical and there was nothing wrong with a forest owner choosing to export whole logs, but the Government's responsibility was to ensure that the market worked in such a way as to produce the best possible result for the country as a whole.

"We're not going to be penalising forest owners for selling logs offshore, what we are going to be doing is supporting the domestic processing industry with some smart new policies which allow them to, in turn, be more competitive in bidding for that log supply."

The forest package was an example of Labour's over-arching policy strategy and there were likely to be two more sectors covered in the next month.

The party didn't have the resources to produce a comprehensive strategy for every industry, Mr Cunliffe said.

"But the voters going into the polling booth in November will be able to join the dots."

The Green Party says if it is part of the next government it will offer a $1 million prize for the first company to build a a 10-storey structural timber building in New Zealand, and bring in other measures to reduce the export of unprocessed logs.

National intends to release its forestry policy later in the year.

The Nelson Mail