Call for Government action to help forestry

Forest industry bodies have issued a wish-list of measures they want the next Government to adopt to improve the investment climate.

Apart from two sawmills being built, new investment in wood processing has ceased, they say.

The wood harvest has declined, new plantings are at an all-time low and jobs are being shed.

They attribute these woes to factors such as the high dollar, shipping costs, falling world prices, high electricity prices and an uncertain outlook for power, and uncertainties arising from climate-change policy.

They also cite difficulties in gaining resource consents for new processing investment, inadequate roads, skill shortages, issues with timber treatment which have affected how wood is perceived in the domestic market, trade barriers and illegal logging in Russia and other rival suppliers.

Despite these difficulties, the industry has considerable potential, as evidenced by offshore interest in buying forests. Global demand for timber products continues to increase and New Zealand's comparative advantage as a place to grow trees remains.

Forest Industries Council chairman Lees Seymour said: "As an export industry we have been challenged by things like shipping costs and the global commodity cycle. Those are our problems and we have to manage them. But the local regulatory environment is not helping us and Government can do something about that."

The wood harvest is expected to be half as large again by 2015 but Seymour said the Resource Management Act was a major disincentive to invest in added-value processing.

Among the policy measures the industry wants are:

* Scrapping the carbon tax due to come into effect in 2007.

* Incentives for new planting.

* Compensating landowners when public benefits such as carbon sequestration or biodiversity are required from private assets.

* Reforming the RMA to give local authorities less discretion, have more national standards and greater certainty of process for investors.

* Cut company tax and faster depreciation of large, capital-intensive projects.

* Maintain vigilance on biosecurity.

* Continue investing in infrastructure - transport and energy.

* Continue pressing for open markets.

* Spend more on skills and training.