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Progress Likely on Pre-1990 Forestry Policy

Media Statement

Embargoed Until

2.00 pm Sunday 9 March 2008

Progress Likely on Pre-1990 Forestry Policy

The Flexible Land Use Alliance says progress is likely on the difficult issue of policy for pre-1990 forests under the planned Emissions Trading Scheme (ETS).

The Alliance’s positive assessment follows meetings over the last fortnight with the Government and all other political parties represented on Parliament’s powerful Finance & Expenditure Select Committee, which is considering the Climate Change (Emissions Trading & Renewable Preference) Bill under which the Emissions Trading Scheme will be retrospectively introduced from 1 January this year.

Under the Bill’s current provisions for pre-1990 forests, which the Government said in the Explanatory Note to its Bill that it was prepared to reconsider, owners of pre-1990 forests face retrospective liabilities if they harvest their land. The liabilities are now conservatively estimated to be $20,000 per hectare and perhaps as much as $65,000 per hectare.

While current proposals allow the liability to be avoided if land owners replant the exact same land, the Alliance says forest owners should also be able to avoid the liability if they plant an equivalent parcel of land nearby or elsewhere in New Zealand. It says the atmosphere does not know the difference between a forest planted on one side of the road or the other, and benefits in exactly the same way.

The Alliance is a significant force in the New Zealand primary sector, representing Blakely Pacific Ltd, Carter Holt Harvey Ltd, Fonterra Co-operative Group Ltd, Forest Enterprises Ltd, Landcorp Farming Ltd, the New Zealand Forest Owners Association Inc., PF Olsen Ltd and Wairakei Pastoral Ltd. It also has strong links with other key players in the primary sector, including the Federation of Maori Authorities and the meat, wool and horticulture industries. It believes it can play an important role in delivering the Government and Parliament a consensus from throughout the primary sector around key aspects of climate change policy.

The Alliance’s spokesman, Ross Green of Wairakei Pastoral Ltd, said every party had given the group a fair hearing and had agreed that, in principle, it should not matter which side of a road a forest is planted, in terms of how it is treated under Government policy.

“Forestry Minister Jim Anderton made clear to us that he will take a ‘heap of convincing’ that our offsetting proposal should be allowed, given the current wording of the Kyoto Protocol that his officials are working hard to change, but that he is prepared to consider it,” Mr Green said.

“We appreciated the Minister’s candour and we are determined to meet his challenge.”

Mr Green said that Mr Anderton had agreed that the Flexible Land Use Alliance could have more input in developing policy, with an opportunity to appoint an independent economist to review, at an early stage, work by the University of Waikato and Covec, which are themselves considering proposals for pre-1990 forests developed through the Government’s Climate Change Leadership Forum, of which the Alliance’s Peter Clark is a member in his capacity as Chief Executive of PF Olsen Ltd.

Mr Green said the Alliance was also pleased with the response of the National Party to its proposals.

“Through 2007, the National Party strongly campaigned against Government proposals for a $13,000 per hectare deforestation tax. On 23 February 2007, for example, the party’s Climate Change Spokesman, Nick Smith, called on the Government to ‘scrap the deforestation tax’, correctly claiming that it was causing deforestation. He said that ‘the answer is not regulation and taxes, but changing the investment climate for forestry’.

“When National was strongly opposing a $13,000 per hectare deforestation tax on land owners, it was obviously not taken by land owners to mean the party would support regulations to impose a $20,000 per hectare liability for the same activity. National has always supported flexible land use, and our agricultural and forestry sectors, and we are confident that will continue.”

Mr Green said Dr Smith had also made clear to the Alliance and to the media that he believed offsetting had merit as part of any compromise package that needed to be developed.

Strong support for offsetting had also come from the Green, UnitedFuture, New Zealand First and ACT parties. Positive talks had also been held with the Maori Party, which continued to be in discussions with Maori land owners on the issue.

“We are delighted with this response from across the political spectrum,” Mr Green said.

“Every political party is listening carefully to the primary sector on the importance of land use flexibility.

“We can report that a majority of the Finance and Expenditure Select Committee are from parties which have strongly supported the idea of offsetting publicly in recent days, or which strongly opposed the Government’s plans for a $13,000 per hectare deforestation tax through 2007.

“It is quite clear that there is a not a majority on the Select Committee for the current proposal and it will need to be changed. Combined with the parallel processes being used to develop policy for pre-1990 forests, of which we are now more formally involved, we believe progress on this important issue is likely in the very near future.”

ENDS

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