Afforestation Grant Scheme Pre-Budget Announcement

E aku rangatira, tēnā koutou katoa. Ka nui te honore ki te mihi ki a koutou.

Good morning everyone, and thank you for joining us here today.

Before I get started I would like to thank Jamie Falloon for hosting us on his property.

I also want to extend a welcome to your local MP Alastair Scott and thank the hard working staff at the Ministry for Primary Industries who have put this event in place.

I would also like to acknowledge members of regional councils, Mike Kawana- Kaumatua for Rangitane, and Demetrius Potangaroa – Kaumatua for Kahungunu ki Wairarapa.

Very soon we will wander up the road to hear from Jamie about his property and the planting of over 100 hectares of forest with the assistance of the previous Afforestation Grant Scheme.

The previous scheme ran from 2008 to 2013.

It resulted in 12,000 hectares of new forest, and much of it on erosion prone land.

The Afforestation Grant Scheme has significant environmental benefits over and above increased forest planting.

It improves water quality by reducing sediment build up in waterways, and reduces the impact of severe flooding.

It also provides additional carbon storage, mitigating climate change and counting toward New Zealand’s national emission reduction targets.

Planting forests on marginal farm land also helps to protect the land across the rest of the farm making sure it remains productive and capable of delivering an economic return into the future.

The last scheme resulted in 1.6 million tonnes of additional carbon dioxide stored in our forests.

Today I am very pleased to confirm a multi-million dollar reboot of the Afforestation Grant Scheme.

The new Scheme will see $22.5 million invested over the next six years, resulting in an expected 15,000 hectares of new forest.   

We understand that forestry is a long-term game. And we know the start-up costs can be a huge barrier.

The Afforestation Grant Scheme lowers the cost barriers for regional New Zealand by covering the establishment costs of new planting.

The grant rate will be a fixed rate of 1,300 dollars per hectare for all applicants.

The first application round will open near the end of this month, and close at the end of June in order for planting to begin in winter 2016.

A great thing about the scheme is that it’s an initiative for Kiwi farmers and landowners.

It is perfect for Kiwis who want to take poor performing or erosion prone land and convert it to more profitable forestry use.

This has been proven throughout New Zealand from Northland to the southernmost tip of the South Island.

When I looked at the regional figures from the previous scheme, what really stood out to me was the vast number of small forest blocks, between 5 to 50 hectares, that are dotted around the country. Particularly along the lower half of the South Island, where close to 3,000 hectares were planted by the public through the previous scheme.

Here in the Wairarapa people planted over one thousand hectares.

This included about 92 hectares in Carterton, 172 in South Wairarapa, and nearly 800 hectares in Masterton, made up of mainly smaller blocks of land.

This goes to show that your local farmers see forestry as the best land use for marginal paddocks.

The Afforestation Grant Scheme is a catalyst for the forestry sector, and the regional economy.

Over the life cycle of trees planted through this scheme, the ongoing maintenance of pruning, thinning, and harvesting the 15,000 hectares will support the regional economy, and support employment in the forestry sector.

The Afforestation Grant Scheme will also help the forestry sector scale up for further planting in the future.

It will see landowners throughout New Zealand preparing their land this year, and nursery’s beginning to grow seedlings for planting next winter.

The Ministry for Primary Industries will be working with regional councils and iwi to help identify land best suited for forest planting.

Primarily we want to ensure this scheme targets under-utilised land, and particularly erosion prone land.

But we also have another goal in mind.

We believe that Maori agribusiness has a crucial role to play in wider regional development.

By supporting the growth of the Māori economy, this Government is supporting the growth of New Zealand's economy.

At the end of last year the Ministry welcomed the release of a report it commissioned from PwC called ‘Growing the Productive Base of Māori Freehold Land’.

The report highlighted the long-term economic opportunities if Māori freehold land were used more productively, for instance through forest planting.  

It concluded that the land has the potential to contribute to an increase in GDP of $1.2 billion between now and 2055. We want to encourage this opportunity to be realised and the new Afforestation Grant Scheme is one example of practical assistance to make this happen.

We hope that iwi and Maori landowners will take advantage of the Scheme to increase the sustainable development of their land.

As an example, under the previous Afforestation Grant Scheme just six hectares were planted in Northland.

The PwC report identified close to 4,600 hectares of land in Northland that could be converted to forest. Much of this is currently unused grasslands.

1,600 hectares is readily accessible for afforestation, and the economic outcomes at harvest would be an increase in accumulated GDP of $56 million over the life of the forest.

By working with Iwi, landowners, local businesses and local government, the Afforestation Grant Scheme will support the work happening throughout our regions to improve the productivity of underutilised land.

These organisations will be our partners in delivering the far reaching benefits of the Afforestation Grant Scheme.

Regional Councils have an important role to play with their land management programmes.

Partners such as the Greater Wellington Regional Council, represented here today, have the skills and deployment to ensure that the Scheme is targeted where it will achieve the greatest economic and environmental benefit to the regions.

Because, for New Zealand to build a more productive and competitive economy, we need all our regions to achieve their potential.

That’s precisely what the Government’s Business Growth Agenda is all about.

We want our economy booming and our regions thriving.

The Afforestation Grant Scheme is an investment in our regions.

If land is used more productively, the outcome will be increased income and job creation and economically resilient regional economies.

Of course, this is a long term game. Over the next five years most of the activity will be limited to establishing forests, and larger economic benefits will only come around in the later years. But it is important to look to the future.

I want to touch on an aspect of forestry that should not be left unmentioned in the context of planting more trees.

If we are to increase planting, we need to think more carefully about how we harvest and realise the value of our logs.

Leading into the 2020s, there is the potential for a 40 per cent increase in log production.

We want to see industry move wood products out of the commodity basket and up the value chain.

Currently we are missing the opportunity to supply high value wood products to the world because more than 50 per cent of our logs leave our shores unprocessed.

We need to support the innovation of the engineered timber sector, and we need to invest in skills training to support the growth of this sector. These are two of my priorities for forestry this term.

Last month I met with some mill managers from central and northern North Island who were struggling to fill a range of vacancies in their industry. This has been an ongoing concern across the primary sector.

There is a variety of work happening across government and with industry to support this drive but we have a steep hill to climb.

We need to be making forestry an attractive option for young people.

Over the next decade, and as we near harvest, the forestry industry will be using more technology and producing more innovative building solutions that require strong business and engineering expertise. This is an exciting time for this growing sector.

Not only do we need to encourage forest planting, we also need New Zealanders to realise the opportunities in forestry as an exciting career path for their children and grandchildren.

Lastly, I want to emphasize that New Zealanders can be confident that they are supported by considered and sensible government policy.

I believe New Zealand is in a good space.

Under the leadership of Prime Minister John Key, we’ve maintained welfare support and supported New Zealanders from welfare into work, we’ve maintained and improved health and education, and we’re thinking ahead to the requirements of a growing economy and a better community through to 2020.

Last year, New Zealand was among the fastest growing developed economies in the world.

And the 146,000 new jobs created in the past two years represent the strongest employment growth we’ve seen in New Zealand for over a decade.

This is allowing us to ensure New Zealanders benefit from our growing economy, and look to the future with confidence.

On that note, I invite you to join me to view Jamie’s farm, and learn how the Afforestation Grant Scheme can be used to assist sustainable land management practices.

Thank you

Nō reira, tēnā koutou, tēnā koutou, tēnā koutou katoa.