P.M. accuses forestry executive of ‘hysteria’

Press, 4 February 1982, Page 3

P.M. accuses forestry executive of ‘hysteria’

Wellington reporter Any executive of a forestry company who said that production cut-backs would result from the withdrawal of certain forest products from “high priority status” was indulging in a burst of premature hysteria, said the Prime Minister (Mr Muldoon) yesterday. “No executive of any consequence would make a statement like that,” he said. Mr Muldoon was asked to comment on reaction to the Government’s decision yesterday to drop the 40 per cent investment allowance on new plant and equipment for eligible forestry products to 25 per cent. “There was plenty of warning,” he said. “They will have to have a look at their proposals, and make their decisions in the light of current circumstances.”

He had announced in the last year’s Budget and during the General Election campaign that the Government was planning to reduce the incentives.

“It was widely felt that the total incentives to the forestry industry were excessive, and the great weight of pub-

lie opinion would take that view,” said Mr Muldoon, He said that in the Budget and subsequently last year he had made it clear the Government was looking at the incentives with a view to reducing them.. “J would be astonished if the sharemarket has not long since absorbed the Government’s proposal to do that,” he said. The Press Association reported the joint managingdirector of Carter-Holt (Mr R. H. A. Carter) of saying that the Government’s decision to make big changes in. investment allowances for’ forestry companies could have a severe effect on the decision-making for new projects. Speaking in Wellington, Mr Carter said he was awaiting the full details of the plans, especially the date they would be implemented. “Fortunately the building of our extensions are well advanced. I think we are 0.K.,” he said.

How serious an impact removal of Government incentives to a range of forestry products would have on the proposed joint venture

C.S.R.-Baigent pulp mill at Nelson would not be known for a few days, said Mr Brian Wall, managing-direc-tor of H. Baigents and Sons, the New Zealand partners in the mill. The cut in incentives would not mean the end of the project, as had been suggested, he said. Mr Wall said that at no stage had the Government incentives been considered as permanent. The pulp mill had not been planned with the incentives as an integral part. Under the terms of the 40 per cent allowance, the increased allowance applied when the new plant was in place and working in the financial year. Mr Carter said that his company had been warned of the Government’s thinking, but did not know the details. “An argument has been going on for some time.” He said that he was fairly confident the changes would not affect his company adversely because it had submitted its plans a long time ago and they were approved. Cut-backs, Page 10