COMMENT FROM THE CAPITAL STUMPAGE RATES CLUE TO DECONTROL OF TIMBER ?

Press, Volume CIV, Issue 30776, 14 June 1965, Page 10

COMMENT FROM THE CAPITAL STUMPAGE RATES CLUE TO DECONTROL OF TIMBER ?

(From Our Parliamentary Reporter)

WELLINGTON, June 13.

The decontrol of timber prices, which has been on the agenda of the Minister of Industries and Commerce (Mr Marshall) for some years, could be deferred for some time because of the widespread efl eel a sharp variation in timber prices might have on the economy.

Building supplies, timber, hardware and some associated items are on a list shown to the Government Party caucus last month .is being possible commodities for decontrol. Ihe advisability of freeing timbei has been closelv discussed bv the special study group set up by Mr Marsl; ill, and later this month tlie views of the timber industry are likely to be sought.

Strong groups within the Government have advocated the decontrol of timber prices for some time. At present, however, several factors are influencing the position. The production of sawn timber in the year ending March 31 last was the highest ever, at 736 million board feet. In his Budget speech, the Minister of Finance (Mr Lake) disclosed Ihe Government’s intention to use regulations enabling the Ministry of Works to defer for as long as 18 months the issue of building permits for jobs costing more than £30,000. Such action would greatly affect the demand for timber, particularly for the internal finishing of motels, school buildings, and large projects which would use wood extensively in internal partitions and decoration. When sawmillers, builders and timber merchants see Mr Marshall, they will find it difficult to give a firm undertaking that timber prices would not soar after decontrol because of certain factors which cannot be assessed in advance. One of these is the stability of “stumpage rate.” These are payments to forest owners by those cutting and processing the trees of a particular plantation. Stumpage rates are supposed to be calculated on the costs involved in processing the timber. They are paid to the forest owners “per stump” of timber cut and processed, and are supposed to recompense him for his trouble in growing the timber, and for reafforestation.

It is suggested that, instead of being geared to actual costs, stumpage rates tend to be adjusted on the retail price of the finished product. This means that most of the gain in increased timber prices could be “siphoned off” by increased stumpage rates. Thus, before saying whether or not timber prices will rise on decontrol, representatives at various levels in the industry are likely to ask that stumpage rates should be pegged at reasonable levels. This could be an awkward request. As owner of “the greatest man-made forests,” the New Zealand Government, through its Forest Service, is New Zealand’s largest recipient of stumpage rates. The formation of an independent air-sea force on the lines of the United States Coast Guard is one of the methods now being investigated by the Government by

which the vastly-increased territorial and fishing zone waters delineated by the Territorial Sea and Fishing Zone Bill may be patrolled.

The Bill, fifth on the Order Paper, is expected to become law on January 1. Members on both sides of the House have expressed the opinion privately that little profit can be gained from such legislation unless there are facilities to see that it is fully enforced.

Counting the territorial and fishing zones as one, the area requiring patrolling once the Bill is passed will exceed 36,000 square nautical miles, of which only onequarter will be defined as territorial limits. Complaints over the past few years have indicated that the existing 9000 miles of territorial waters could be more adequately controlled. To this area must be added the considerable area now described as “internal waters.”

Answering a question by a Government member in Parliament on Friday. the Minister of Marine (Mr Scott) said that the addition of a new 55-foot, 20-knot launch to the present patrol fleet was expected by the end of the year. This would increase to only six the number of Navy-manned fisheriespatrol launches available. In practice, the existing five craft (which due to maintenance requirements are rarely all at sea at the same time) have served merely to patrol certain well-defined areas.

Mr Scott confirmed later that the task of this flotilla is the supervision of New Zealand fishermen, and that any question of incursions of foreign fishing vessels should be referred to the Department of External Affairs. The new vessel, now building in Auckland, is expected to be completed on September 30. The present legislation was envisaged when she was ordered, but an initial request for a second new vessel was turned down at Government level. Present discussions between the Marine and External Affairs Departments are

I likely to confirm that interim coverage of the new area will be carried out by naval frigates and smaller radarequipped craft, working in conjunction with the new Lockheed Orion maritime reconnaissance aircraft. The Sunderland flying-boats are likely to be seconded to this service as present duties are taken over by the faster landplanes. Indeed, the retention of a flying-boat service, which has been urged because of the fine record of the Sunderlands in missions of mercy and air-sea rescue work, is more likely now than before. The chief difficulty with this scheme as a permanent arrangement however, is that the first call on the Navy and Air Force is for defence. A call for more ships or planes in the “near north" could leave New Zealand almost bereft of fishery and “foreignintrusion” patrols. The formation of an independent service might not he as costlv as expected earlier The United States Coast Guard has its counterpart in Japan, and both countries have worked out their designs of vessels and planes needed especially for the job. The United States ice-breakers of Operation Deepfreeze are well known in New Zealand waters. There are many lighter vessels classed as “coastguard cutters” which carry out duties along the entire length of United States territorial waters.

The United States Coast Guard and its Japanese counterpart make extensive use of flying-boats, generally of the twin-engined Martin Mariner and Grumman Albatross type. The Japanese Government, concerned recently about failure to continue with flyingboat design, has now produced its own Grumman variant—expressly for use in air-sea rescue and fishery palrol. The Territorial Sea and Fishing Bill will not become operative until January 1, 1966. It is expected that decisions on means to implement it will have been taken some time before. A long-term plan should be seen that would be more concise than the “Marine-External Affairs and armed services” arrangement that is envisaged as a stop-gap.