Industry Support For Variable Savings Rate tool (VSR)

Press release: 29 April 2014

The operator of New Zealand’s largest sawmill and Rotorua’s largest employer, Red Stag Timber, supports the introduction of Labour’s Variable Savings Rate tool.

CEO and Chair Marty Verry says “a variable savings mechanism to support the OCR tool is something the forestry and wood processing industry advocated hard for leading into the 2007 Select Committee review of Monetary Policy tools.

“It is heartening to see the policy now being adopted by one of the mainstream political parties, and we call on other parties to support and implement it.

“I think I can speak for those in the smoko rooms as well as the board rooms of New Zealand in saying we would much prefer to pay extra into our own savings than interest rates.

“If in doing so we rely less on the OCR tool, with its detrimental effect on the exchange rate, then that has to be a good thing.

“Having a larger pool of savings will also support investment by companies like Red Stag Timber, who is ready to invest $120 million in a new state-of-the-art global scale sawmill pending government adoption of a ‘Wood First’ policy. Similar policies are in place in France, Canada, Japan, and the USA.

“The investment in supply-side capacity will also help suppress inflation. In our sector, that means lower building materials and housing costs, which are current sources of inflation,” adds Verry.

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