Media Statement

For immediate release

Friday, 8 July 2005

United Future announces forestry policy

United Future forestry spokesman Gordon Copeland today released the party's forestry policy for the 2005 election. This includes:

* giving all necessary government assistance to the forest sector to move up the value added chain through industry partnerships so that high value products, rather than unprocessed chips or logs, ensure that "NZ Inc" maximises its returns;

* unleashing new investment into the forestry sector by changing the tax law to ensure that the anomaly whereby, when partly grown trees are sold, the seller is assessed income tax, but the purchase amount cannot be deducted by the buyer, is removed. Under United Future's policy the amount of the income tax paid by the seller would be paid over to the buyer by way of a forest encouragement grant and income tax on wood lots deferred until harvest. The present tax anomaly is a barrier to the financing of new investment.

* a review of the current tax treatment of R&D to incentivise innovation which will take wood products higher up the value chain in international markets.

"The forest industry is already New Zealand's third largest export earner and directly employs over 200,000 people," said Mr Copeland.

"I welcome the recently announced formation of Woodco, an umbrella group for the industry, as an important step in the right direction. Like dairying and kiwifruit I look forward to a maturing of the industry which will see our forest based products make an even greater contribution to New Zealand's future prosperity.

"United Future's policies will, I know, assist that process and bring more NZ investors into the industry."

United Future recognises the strategic role of the forestry sector in the New Zealand economy in providing jobs, income and export earnings, while also balancing its contribution to the recreational sector.

United Future will:

- Assist the forest sector to move up the value-added chain through research and development and industry partnerships, so that end products derived from our forests, rather than unprocessed chips or logs, are exported to the greatest extent possible. We will also review the tax treatment of R & D to generate incentives for an increase in private sector expenditure.

- Balance the need for a viable industry with environmental sustainability.

- Work closely with the industry and other interested parties, such as recreational users, to maintain a strategic overview of issues affecting or impacting on the sector.

- Ensure that weeds, diseases and forest soil quality are adequately monitored.

- Introduce improved fire prevention, detection and control measures.

- Increase resources to control exotic pest populations such as possums

- Impose a moratorium on the aerial application of 1080 until it has been re-assessed by the Environmental Risk Management Authority.

- Defer final income tax on income derived from forestry until harvest where partly grown trees are sold. When partly grown trees are sold the seller will be assessed income tax in the usual way. However an amount equivalent to the income tax paid by the seller will be paid to the buyer by way of a forest encouragement grant.

- Ensure that NZ producers of sustainably harvested timber products are not undercut via the "dumping" of imported timber and products that have been harvested without regard to sustainability criteria.

- Establish legal guidelines for drug testing in the workplace, and encourage comprehensive employee assistance programmes in return for reduced ACC levies, to ensure there are no barriers to implementing testing.

Ends

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