Timber industry tells government to pull finger

By PAM GRAHAM

"Get your fingers out of your ears, stop talking to the wrong people and do something for business."

Wayne Coffey of the Timber Industry Federation said he got calls of support from all over the country after saying that to Economic Development Minister Jim Anderton.

Anderton's "in my office now" summons to forestry industry representatives after comments by Coffey has not impressed the sawmillers' representative.

He was not going to the "headmaster's office," or a "kangaroo court" on December 8 and has invited Anderton for coffee instead.

If Anderton takes the offer up, he is likely to end up in Wellington's Wellesley Club, which has been renovated and turned into a boutique hotel by entrepreneurial sawmillers.

The federation has issues with the Government and members of its own industry, which has a separate Forest Industries Association and Forest Owners Association.

The problems have come to a head as the six-year high in the exchange rate has forced sawmills to lay off staff and close.

They were also raised by Christchurch-based McVicar Timber Group, which is building a new mill in Australia.

It invested in Australia because the New Zealand Government had an anti-business attitude and had increased costs and regulations, spokesman Mark Ockenden said.

The biggest problem with the exchange rate was its volatility but changes in holidays and health and safety laws and the Employment Court had all increased costs.

Export levies, accident levies and corporate tax rates were also issues, though problems with the Resource Management Act had probably been overplayed.

While costs in some areas in Australia were similar, "they will step you through it".

"They are pro-industry. If there is a way of getting around something they will show you."

McVicar's sawmill in northern New South Wales will sell to the domestic Australian market.

"And, boy, do they love us there," Ockenden said.

Coffey's list of issues the Government could fix included treatment and grading of building timber as well as customs levies, a proposed carbon tax, electricity charges, the RMA, employment law and taxes.

Some of the issues are contentious within the industry.

Analyst Gareth Morgan said too much investment in forest ownership had been made for tax reasons, and economic assumptions used in forest valuations were a joke. He said forest values were now falling to reflect low returns.

The rise in the New Zealand exchange rate has come as Chile has become more competitive as its exchange rate has fallen.

New Zealand exports about 70 per cent of its wood fibre. About 90 per cent of Australia's can be sold domestically.