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Mr Anderton & The Timber Industry

Stephen Coyle, President
Otago/Southland Timber Industry Association

Mr Anderton & The Timber Industry

In recent months the sawmilling industry has experienced increasing difficulty in maintaining its level of exporting timber particularly to the USA and Asia.

The principal reason has been the steadily increasing value of the NZ dollar against the US dollar which one NZ Trading Bank says results from “rumours that option traders have interest in both the NZ dollar and the Australian dollar and are intent on containing them to tight ranges”.

In view of the above it is difficult to accept Mr Anderton’s recent statement (Radio NZ Morning Report 24 November 2003) that the present exchange rate is solely due to “the weak US economy”.

Sawmillers in Otago and Southland are continuing to ship sawn timber to Asia and the USA because to do otherwise would destroy the trading relationships, which have been painstakingly built up over many years. It is no secret that this trading is now unprofitable and Mr Anderton shows no appreciation of reality when he says that “we have to do far more, and every company knows it, for the processing of high value wood not low end commodity products”. Mr Anderton should recognise that what the customer wants is what the sawmiller supplies – unless he wants to lose the business. Mr Anderton displays a low level of awareness of the marketing being undertaken by exporting sawmillers who in many cases are converting low quality logs into “high quality furniture grades” through processing in what he calls “old relatively inefficient plants”.

Mr Anderton should find time to visit some of our sawmills and discover at first hand how we compete on the world lumber market and perhaps share with us some of the $30 million he has put into forestry roading “in the North and in the East Coast absolutely unsubsidised”. (As with Team NZ and the movie industry).

Mr Anderton wants to eyeball the industry to explain all the things he has done in the last three to four years. Perhaps he could also explain the reason for the increases in the following taxes:

Fringe Benefit Tax
Petrol Tax
Road User Tax
ACC Employers Levy
ACC Levy on Petrol
ACC Vehicle Levies (diesel vehicles up from $176.10 to $221.31)
Fire Service Levy
Proposed Carbon Emission Tax – which will cost small mills approximately $145,000 per year if using coal to energise their boilers.

The timber industry objects to increased taxes being used for the more glamorous activities such as film-making, yacht racing and information technology, particularly as it has invested heavily in recent years to increase its production and productivity – all aimed at the export market.

Instead of taxing and regulating the industry the Government should be supporting the private sector if it wants to build an improved standard of living in this country – one that is strong economically and socially.


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