Labour leader David Cunliffe. Photo by Getty
Labour has dismissed suggestions its suite of policies
intended to boost forestry and wood processing will make it
mandatory for wood to be used in new buildings built by the
Government and others.
Leader David Cunliffe this morning unveiled a package at the
Forestwood Conference this morning intended to assist the
industry move from "volume to value" by increasing the amount
of New Zealand logs processed into higher value products in
That included a "pro-wood" policy for new government
buildings, tax breaks for investment in new processing plant,
special loans for tree planting, and forestry joint ventures
The pro-wood policy procurement policy is a softer version of
the "wood first" policy advocated by some in the industry and
is based on former Forestry Minister Jim Anderton's
requirement that all government-funded project proposals for
new buildings up to four storeys high "shall require a
build-in-wood option at the initial
concept/request-for-proposals stage (with indicative sketches
and price estimates)".
Labour has taken that a step further by requiring the agency
responsible for the building to give an explanation if it
chooses alternative building materials over a similarly
priced wood structure.
Speaking to reporters in Beijing this morning, Prime Minister
John Key said "if they are saying to companies they are going
to force them to use wood over another product then I think
that would be a very interesting place to get to".
"I'm not sure every company would want to build its building
like that. The same with government departments, again, I
think you'd need to be cautious about that."
But Mr Cunliffe said no one was going to be required to build
"That's a decision made by the folks who are contracting for
the individual buildings. What we're going to ensure is that
a pro-wood option is considered and where it is at least
equally cost competitive if it's not selected then there's
some explanation for why an alternative structure was
The other key plank of Labour's policy package was what
finance spokesman David Parker called "a targeted tax
incentive" which would assist wood processors overcome the
increased risks they faced doing business in a small economy.
Labour's plan is to double the depreciation rate for
investment in new processing plant from 15 to 30 per cent a
"This will encourage the substantial capital investment
needed to maximise value from our wood industry", Mr Parker
That would cost the Government about $10 million to $25
million a year but would generate up to $80 million a year in
new investment, "and of course there's a benefit back to the
taxpayer because we get higher taxes from people's wages and
company profits because they're making more money as well",
Mr Parker said.
Labour hadn't modelled the resulting increase in jobs, but Mr
Cunliffe said: "we would expect a healthy increase of
employment and an increase in the average income as those
jobs pertain to higher value products".
Labour would also move to secure long term supply of raw logs
with long term incentives for tree planting including a
"suspensory loan" scheme and planting joint ventures with
Suspensory loans would be made available for the planting of
new forests with an interest rate likely set at 1 per cent
over the Crown's rate of borrowing. Principle and interest
would repayable only when the forests were harvested.
The iwi joint venture would be based on the long running Te
Tai Tokerau Forests scheme.
Mr Cunliffe also said a Labour government would establish a
forestry taskforce, similar to Taskforce Green to get about
1000 long term unemployed working in the industry.
The scheme would be targeted at regions with high long-term
unemployment such as Northland, East Coast and the central
plateau and would involve tree planting on marginal Crown
land and will include incentives for the private sector.
Wooden it be lovely- Labour's forestry and wood processing
# Tax deferrals in the form of accelerated depreciation to
encourage industry to invest in new technology and plant.
# A pro-wood government procurement policy for
government-funded buildings up to four storeys high to boost
the domestic market.
# Suspensory loans to encourage new forest planting.
# Forestry taskforces for long-term unemployed.
# Introduce legacy forest status to protect our indigenous
- Adam Bennett of the New Zealand Herald