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Tuesday, 21 February 2012 15:40

Compulsory log levy proposal from NZFOA

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FOREST AND woodlot owners could face a compulsory levy when they harvest and sell timber.

The New Zealand Forest Owners Association last week concluded nine nationwide meetings to gauge support for the idea which, if it gains a mandate, would be implemented under the Commodities Levy Act (CLA).

Currently NZFOA is a voluntary membership organisation and there is a view among many members that non-members reap the benefits of the association's work, without making a contribution.

Glen Mackie, senior policy analyst at NZFOA, told Rural News the meetings were a fact-finding mission. There's no final proposal yet; this will follow when the views from the meetings are analysed.

"The first step we have to take [under the CLA] must be to identify who's actually going to pay the levy and we have to make sure those people have the opportunity to give their views on whether they want to pay it.

"Also, if the levy is successful, they have to have the ability to have a say on how the levy is spent."

The meetings are also about assessing the state of the industry, says Mackie.

One challenge for the NZFOA is that everything, including membership, is voluntary.

"There are voluntary contributions by individual companies to industry-good projects including fire, harvesting and biosoecurity research [but] at the moment it's all voluntary on an ad hoc basis. Those companies that feel they benefit directly will fund a project but others don't and are under no obligation to do so.

"We find the vast majority of these projects benefit the majority of forest owners so the idea of the levy is an opportunity to widen the funding base."

The proposed levy would apply to planted production forests, not harvested native timber, when trees are taken, be that for woodchips, posts or logs.

"It would apply only at harvest. Nothing would be paid until then, when the forest owner has cashflow."

Each year about 26 million m3 of timber is harvested in New Zealand so cash would be available from the day a levy was introduced. The amount of the levy isn't yet known because it would depend on what levy payers wanted to fund, and what they were prepared to pay. Mackie doesn't believe it would be large.

If there is support for a compulsory commodity levy, a final proposal will be drafted and all those who would be liable to pay would have a final say in a referendum late this year or early next.

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