Levy rate set to increase for foresters

Wednesday 9 Dec 2020

Forest Growers Levy Rate to increase for the first time in seven years - The directors of the Forest Growers Levy Trust have raised the rate on Harvested Wood Materials, for the first time since the levy was introduced by a forest grower referendum in 2013. The chair of the Levy Trust, Geoff Thompson, says clear support for the value of the investment, led to the decision to raise the levy from 27 cents a tonne to 33 cents.

“We had overwhelming support in our levy referendum at the beginning of last year, from small and large scale foresters, even more than when the levy was first voted on.”

The FGLT was set up under the Commodity Levies Act, where producers of a commodity can vote to impose a levy on production for common-good projects. The levy has raised about $10 million per year in recent years. Geoff Thompson says Covid-19 in China early in the year and the lockdown in New Zealand soon afterwards, was a severe hit on levy income and required a fresh look at how spending commitments could be met, and the prudence of replenishing reserves.

“Our main priority is research, to fund projects which increase forest productivity, whether in large forests or in farm woodlots. We fund major investments in harvesting technology, forest management and mechanisation. Another priority is the Forest Industry Safety Council and its projects to make forestry a safer place to work after the horror stories early in the decade. We still unfortunately aren’t at zero fatalities and serious injuries, which is the aim, but this year we’ve had the lowest fatality rate in six years,” Geoff Thompson says.

“Biosecurity is no less vital for us than for any other part of the primary sector. A biosecurity officer is now part of the FGLT Secretariat’s staff. Projects like these allow leveraging of other funding from the Government sector. Our biosecurity funding is an additional eye-out for all the pests and diseases which may arrive in New Zealand and harm native trees or the horticulture industry.”

“This is the first time the rate has been increased since the levy was brought in. In the following seven years inflation has chewed through its value, so half of the increase is just catching up to where we were before.”

Geoff Thompson says the decision followed close consultation with the Forest Owners Association and the Farm Forestry Association. “We also surveyed owners of forests when we did the referendum last year. The consensus was that we had set the levy rate too low, and it should be about 35 cents a tonne, so more work could be done with it.”

“The change will also meet new challenges in the industry, such as the political attacks on landowners’ right to prevent a land use choice of planting trees for harvest and carbon credits. But looking forward, we need to assist in the huge and vital area of research into new wood uses, such as resins which replace plastic, transparent timber sheets that can replace glass and biomass use for no-emission energy production. Trees are a huge part of the bio-economy future.”



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