‘Govt forests save industry money’

Press, 28 February 1986, Page 2

‘Govt forests save industry money’

By OLIVER RIDDELL in Wellington

The timber industry has been making a killing for years on trees planted with public money, according to the Minister of Forests, Mr Wetere, and the Minister of Finance, Mr Douglas. Timber resources planted and built up by the Government have, for the most part, saved' downstream private sector processors the trouble of planting their own forests.

They said timber industry leaders were “crying crocodile tears” by complaining onl/now about the size of the holding of the Forest* Service and their inclusion in the proposed Forestry Corporation.

One of the main reasons the State had become the main supplier of timber in New Zealand was that the taxpayer had been funding a vast planting programme over the decades — with little regard for commercial criteria. Hundreds of millions of dollars worth of State forest planting had been funded with interest-free

money from the taxpayers through the annual departmental votes, the two Ministers said. Until 1985 there had been little regard for commercial objectives such as cost recovery or return on investment. In many cases this had led to plantings which, if they had been funded by a private company, would not have been a worthwhile investment. ;s, k

» ‘‘On that basis, it Would have been better to leave the money in the taxpayers’ hands,” they said.

Taxpayers deserved better than to have a Government timber resource being used to save private companies ; the trouble of planting their own forests. That was why the Government was establishing a Forestry Corporation on a commercial footing. This corporation would be subject to the same costs and disciplines as the private sector, thus losing what had been in effect a privileged position. It would also be placed outside the scope of political influence which had, in the past, been responsible for poor investment decisions.

All this gave, a chance to create an efficient State forestry operation which would make the best use of the taxpayers’ investment, the two Ministers said.