Speech: Address to ForestWood 2014 Conference

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

I would like to acknowledge the pan-industry conference organisers; the Forest Owners Association, the Wood Processors Association, Pine Manufacturers Association and the Forestry Industry Contractors Association.

I would also like to acknowledge our MC Dr James Buwalda and my fellow panellists, Labour’s Hon. David Cunliffe and Dr Russel Norman from the Greens.

It is great to see ForestWood – the annual whole-of-industry gathering - going from strength to strength.

Last night I enjoyed attending the NZ Wood Resene Timber Design Awards, a really inspiring event.

I was especially impressed to see the innovative way in which timber is being used in quality building design.

Today, I want to update you on the Government’s policy agenda.

Forestry is a long-term game and a long-term view is required.

Commercial forests can take 28 years from seed to saw – and a lot can happen in that time.

The Government’s Business Growth Agenda supports a long-term view.

Our BGA supports Kiwi businesses and the broader community by focusing on practical initiatives that enable growth and create jobs.

In the forestry sector, that mostly means jobs in the regions.

The BGA maintains a special focus on export markets.

This Government is committed to helping the primary sector double the value of its exports by 2025.

We call this goal the ‘Export Double’.

As New Zealand’s third highest export earner, the forestry sector has a significant role to play in helping to achieve the ‘Export Double’.

The forestry sector is expected to yield $5.1 billion in export revenues by June this year.

This is up from $4.5 billion.

Achieving more export returns for forestry – and transforming it into a $12 billion sector by 2022 as per the WoodCo plan - will require significant changes in the way the sector operates.

To transform the sector there is a web of work which needs to be done – and this Government acknowledges that it has a role to play in helping build, support and foster that web of work.

Our long-term focus is to transition the forestry sector towards a future where demand for high-value wood products will increase domestically and even more importantly in export markets. 

This Government is working hard to create the right business environment.

This is about getting our tax & regulatory structure right.

This Government’s active trade agenda continues to open markets through negotiating new trade agreements, and reducing tariffs and non-tariff barriers within existing agreements.

All 12 key markets have either signed an FTA, or have one under negotiation.

The Government also provides significant funding for research.

We are very supportive of innovation in wood processing and product development.

The total Government funding since 2010 for forestry-related science, research and product development amounts to over $150 million.

This includes Callaghan Innovation, MBIE, MPI, funding for Scion, (the Government’s Crown Research Institute specialising in science for the forestry sector) and Primary Growth Partnership funding.

A couple of the exciting forestry PGP initiatives currently underway are:

1. The Steepland Harvesting project which is helping to overturn the notion that harvesting on steep land has to be expensive and dangerous.

We are already seeing tangible results from this programme.

The ClimbMAX harvester is a ground-based harvesting machine built in Nelson.

The prototype can fell and bunch logs on slopes of up to 40 degrees removing the need for chainsaw operators. 

This amazing example of Kiwi ingenuity is already attracting attention: I note that the YouTube video of this has already had more than 20,000 views.

Based on government/industry funding of up to $6.5 million, the programme is expected to deliver economic benefits of up to $100 million by 2025.

2. PGP project ‘Stump to Pump’, is based on producing bio fuels from forestry waste. This programme received government funding worth $6.75 million in 2013.

Partners Norske Skog and Z Energy are matching this amount, bringing total funding to $13.5 million.

If the technology can be proven and commercialised, the economic benefit could boost GDP by as much as $1 billion a year by 2033.

‘Stump to Pump’ could also stand to create as many as 1,200 regional jobs.

I encourage the sector to put forward market-led innovations - and I make the point that MPI is there to discuss the potential bids and provide assistance and commentary subject to those bids.

In addition to this, over the last six years this Government has spent $30 million on a range of strategic initiatives for forestry.

Including:

• $5 million over five years to the Structural Timber Innovation Company, or STIC, which has already produced world-leading research into seismically resilient building designs that use engineered timber.
• $2 million over three years to professorships at both Auckland & Canterbury University.

Meanwhile Government-funded providers spent approximately $16.5 million between 2011 and 2013 for forestry related tertiary education provision, including industry training.

This Government has also continued the support of further forestry projects under the Sustainable Farming Fund.

All of these measures are helping to ensure the forestry sector is well placed for the future.

Fairly hot off the press is another initiative.

The forestry sector and Government share a common objective of increasing value from the sector and ensuring the regulatory framework is effective and efficient.

To support these objectives the Ministry for Primary Industries, Ministry for Business Innovation and Employment and the Wood Council of New Zealand have formed a strategic partnership.

This is the first such partnership for the Government and sector.

At the first meeting at the end of February the partners agreed to progress three significant areas:

1.   promoting the use of engineered timber

2.   demonstrating that New Zealand timber complies with other countries’ illegal logging requirements

3.   exploring how government policies better reflect the ‘whole of life cycle’ environmental attributes of timber.

The Strategic Partnership will operate initially for two years; meeting four to five times a year.

I am pleased to say that significant progress is already being made on the first of the three areas identified by the strategic partnership.

Engineered wood has the potential to be a game-changer for the industry with the WoodScape analysis showing returns on investment above 10 %.

MPI has already started work on lifting the profile of engineered timber by sponsoring the Timber Design Awards and commissioning a stock take of the technical information available.

I have just received the preliminary findings of a survey of key decision makers involved in the design and construction of engineered timber buildings in Christchurch.

These findings will help identify the issues surrounding the up‑take of engineered wood. 

Clearing regulatory ‘log jams’ that cause inefficiencies within an industry is another vital role for government.

As many of you will be aware MBIE and the forestry sector have set up a programme of work to update the timber structure standard, NZS3603.

This standard will further facilitate the uptake of engineered timber in New Zealand.

An updated NZS3603 will allow multi-storey buildings using the latest materials, methods and technology to be consented as an acceptable solution by Building Consent Authorities.

The work will be carried out in phases, with the first phase expected to be completed within the next 18 months.

This Government is currently putting in place the most significant water and resource management reforms in a generation.

Forestry companies have told me how different planning rules across regional and district councils are adding costs, and creating investment uncertainty for their businesses.

One implementation option being considered is a National Environmental Standard for plantation forestry.

Although good progress is being made there is still work to be done. I encourage all parties to stay involved.

I won’t be rushing to announce our forestry policy today.

We are still six months from the election and I can assure you that I will get the detail to you in good time.

But make no mistake; the work our Government is putting considerable effort into is part of our on-going commitment to making a positive difference for your businesses, and the forestry and wood processing sector.

This includes:

• Investment in science
• Investment in innovation and product development
• Investment in training
• Investment in safety
• Investment in reviewing the NZS3603
• Improvements in the RMA
• New export markets and reduced tariffs, and
• Refining existing afforestation schemes, to make them efficient and effective.

As I said at the start of my address, it is time for the sector to move up the value chain and seize the many opportunities on offer.

Our Government is committed to providing the right environment for that to happen

Government will continue to support you in your endeavours and while we won’t always agree on the way to the means, we want the same success for your sector and New Zealand’s regions as you do - and we are spending considerable effort to help you achieve it.

Thank you.

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