Forests (Regulation of Log Traders and Forestry Advisers) Amendment Bill

E Te Māngai o Te Whare, tēnā koutou, ko ngā mokopuna—greetings to you and, as I said in our Māori language, the mokopuna.

I move, That the Forests (Regulation of Log Traders and Forestry Advisers) Amendment Bill be now read a third time.

This particular bill in its development has been shepherded forward by the officials from Te Uru Rākau, a division of the ministry of te ahu matua—primary produce—and I want to place on record my acknowledgment and my mihi, as we say in our reo, to vice-Minister, otherwise known as manager, Julie Collins, and her team, some of whom are in the House this evening.

I want to traverse some of the key points of this bill and acknowledge the support that this bill has enjoyed, initially from all parties in the House. It was attacked by the former member of Clutha-Southland, and it was also criticised but voted for by the member of Bay of Plenty. Considerable changes have happened in the lives of those two men, but now we are here where we are this evening.

The purpose of the bill—the people of the forestry sector, including the processing sector, should derive a great deal of confidence that their industry is in a safe pair of hands this evening. Gone are the days where the processing sector will no longer be able to enjoy a place of pride. In fact, in the event that electoral fortunes smile upon my good self, I look forward to seeing the processing sector, the planting sector, the nursery sector, and other elements of the forestry industry joining together and creating a credible peak industry body.

If I learnt anything during the process of this bill, I saw the costs of people not working together. Sadly, they catastrophised various statements and they imagined the worst. I don’t want to mention any of them by name because this speech will one day possibly be referred to—in the event that elements of the forestry sector prove to be recalcitrant, it could very well feature one day in a court case.

The purpose of the Act outlines the need for a consistent and reliable supply of timber. There are critics who say the bill doesn’t go far enough and it doesn’t enable the State to force our largely foreign-dominated sector to sell logs at a stipulated price. That was a step too far. The bill very simply creates an occupational licensing regime, and firmly within the sights of this bill is that category of trader otherwise known as a log monger. The owners of small plots of trees were very happy to hear that this bill will register advisers. If it’s good enough to have real estate advisers and agents registered, if it’s good enough to have the advisers of financial alchemy registered, then it’s certainly a good idea to have forestry advisers registered.

It also requires, in terms of developing regulations, practice standards. Practice standards will give a guide as to what is an appropriate level of conduct. I want to go on record and acknowledge the co-leader James Shaw and the Minister of Conservation, who, during various discussions of a small group known as the forestry Minister’s group, reminded me that forestry has a major contribution to play in relation to biodiversity, climate change, and that one shouldn’t just think about the rows and rows with great monotony—similar, like the Kaingaroa Forest. There is an opportunity also to bear in mind the importance in terms of future investments in the forestry estate for biodiversity. It was not where I started, I must confess. However, that’s the value of a functioning coalition Government on the matter of forestry. So, having told the truth there, I shall now move on.

On the question—

💬 SPEAKER: Ha, ha! That’s not a good way of putting it.

—in relation to the need for the processing sector to enjoy a higher level of investment confidence, this day is overdue. Not all log mongers historically have been rascals, but far too many have enjoyed, to the detriment of the good name of this industry, laissez-faire powers. They’ve enjoyed the rights, but they have been unwilling to absorb the obligations. Well, tonight this legislation, God willing, when it passes and the regulations developed—obligations will be imposed on log mongers to not only look after the international purchasers but to address the concerns of the community, of the employees, and of the industry to ensure that this valuable endowment is made available not only for international purchasers but for domestic processes.

I’m going to wind this speech up by reminding us that forestry has a tremendous role to play when we think about the bioeconomy, when we think about a host of additional services and goods that can be derived from this sector. But no one will spend their precious capital if they are beset by doubt and uncertainty as to whether they’ll ever get access to a reliable and reasonably large supply of raw material. This bill represents a step in that direction. Yes, it does unsettle some of the people who have profited from the status quo, but no industry in the post-COVID context should imagine that their stakes or their interests are static. The economy is dynamic. The economy is organically capable of, quite simply, healing itself, because an economy is people, and people are looking for opportunity where they are not going to be gamed but they have a fair and reasonable opportunity to grow their business, the prospects of more jobs, and the prospect of better enterprise outcomes. This bill, which I’ve been completely privileged to bring to the House and shepherd through to this stage of a third reading, is an overdue contribution to those outcomes. My party, as a part of our coalition Government, are absolutely overwhelmed with pride with this bill, and I shall air its benefits widely over the next eight weeks. Thank you very much, sir.

I was quite quick to my feet on that occasion. This bill, I’m not going to be vehemently critical of it, because I think everything that’s brought to this House is brought with good intention. But, none the less, I’m not going to say we’re going to support it either, and we’re not going to.

There are some parts of this bill that I think, like many bills that come to the House, have a little bit of logic to them, depending on how they’re handled as we move down the track. Clearly, I think the registration of people who operate in the sector has some value to the sector and probably to those people who grow and participate in the forestry industry, right from the processing sector back to the person who plants the trees.

Of course, the most important person in the whole of this process is the person who owns the land that the trees are planted on, and, as we’ve seen with some of the decisions made during the COVID lockdown, if you don’t give confidence to foresters and people who plant crops to plant those crops, they won’t plant them, and that will create distortions in the market and all sorts of shortages.

One of the problems with this bill, I think, is that it’s imposing—or it has the potential to impose, because we don’t know what it’s going to impose—a regime on the industry which may well suppress prices. If those people planting trees don’t have confidence in where they’re going at the time of planting—and we’ve seen that on a number of occasions in the last 30 years with the forestry sector in New Zealand, where they’ve lost confidence in the ability to get a return from planting trees, because of various decisions of Government—that puts significant challenges in front of them and dents their confidence. The point is: they don’t plant trees, as a result of it. I think that the potential for this legislation to, effectively, legislate the price of logs down is a significant problem, and I think that will worry forest growers.

I do accept the Minister’s point that there are, really, three different types of forestry owners in New Zealand. There are the big multinationals, and it’s all very well for us to attack big multinationals, but one of the challenges that I’ll get to in a minute is this sector, like many others in our primary sector, is desperately short of capital. There would be ways you could free that up, which I’ll talk about in a moment.

So I think that the part of this legislation that sets up the forestry authority and that gives that authority the opportunity to, effectively, register logging exporters and consultants in the industry and people who participate in the advisory service in the industry isn’t altogether bad and probably has a place. It could’ve probably been handled by the industry itself, and, from my understanding of the Minister’s answer in the committee stage, that may well be how that bit of the bill works. The problem for us is absolutely the regulations and the fact we have no confidence in those regulations.

I think the fact that over 600 people submitted to this thing—and I don’t know how many submissions or emails we got as individual members of Parliament, but it was massively significant; it was of the proportions that I’ve never seen in a bill like this before, actually, so someone got very active. But over 600 people submitted to the Environment Committee on this bill—11 in favour. I’d lay odds that of those 11 that were in favour at the time, at least half of them are no longer in favour. I have talked to a number of those, and there’s no doubt they are no longer in favour of this, because they are very nervous about the way it might manage the thing.

Now, if you look at the industry, and if you look at the industry in my part of New Zealand—I have a pulp mill, I have a fairly large sawmill, I have a very large sector of forestry in the Rangitīkei electorate, and I have two big roundwood producers, and one big roundwood producer right next door, in Nathan Guy’s electorate. The roundwood producers are the ones that are challenged for wood, actually, in my part of the world, not the sawmills and the pulp mills. The reason they’re challenged for wood is because they want a type of log that’s not economic to produce.

In other words, they really want you to grow a tree to about 18 years and chop it down just when it’s putting it’s—I probably shouldn’t be trying to explain something that’s biological, but trees put on a whole lot more weight as they get bigger, like I tend to, actually. They grow much faster towards the end of their life, and the end of their useful life, for a pine tree, is about 30 years. After 30 years, they start to get lighter, for exactly the same reason that we start to get lighter—the calcium in their bones starts to disappear, and they get smaller and smaller! Well, they don’t get smaller, but the wood doesn’t weigh as much.

So what happens with the roundwood suppliers is they cannot get a supply of roundwood, because it’s not economic for a forester to, effectively, grow that wood specifically for them. Now, some of the roundwood operators—and they’re pretty big operators in New Zealand now. You only have to look at the growth of horticulture and pipfruit industry, and certainly the growth of development around the country in the form of roads and things like that, and the amount of roundwood that’s just used on the side of a road, for example—it’s massive. So there’s a very big industry in New Zealand. They’re challenged because there’s only a certain amount of roundwood, or potential roundwood, that comes out of a forest when it’s milled or cut for export at maturity.

So that’s the challenge that is faced in my part of the world. This bill won’t overcome that, because, effectively, it’s got to encourage the foresters to grow wood that they can afford to sell to those people at a price that’s economic for them to grow it. So that’s one of the big challenges.

The other challenge, I think, that this bill doesn’t address and that would solve some of the problems that the Minister has with the processing sector particularly, and also, to some extent, with the harvesting sector, is the fact that they’re short of capital and there’s just not enough capital to develop these industries and to get them going. The reason there’s not enough capital is because there’s not enough income in. So they can’t get the income out of it. So there are other things in New Zealand that need to be changed to enable that capital to be injected into the industry that will give it the equipment they need to compete on the international markets. The reason they can’t, as I said, is because they have not got the capital to do that job properly.

There would be other ways of fixing this other than putting in place a bill that creates regulation that the industry, right across the board, is very nervous about. I don’t think it’s only the big international forest owners that are nervous about it; it’s the people who are planting trees on a daily basis, it’s the farmers and the farm foresters, and it’s those New Zealand people who—and a large number of them do—invest in forestry for the future. They’re the people that are threatened by a lot of what goes on in a bill like this and worry about it. So I don’t want to see for a minute investment in the forestry sector drop off because we put in place a piece of legislation that has the potential to distort the market in the future.

That’s the reason, I think, that we oppose this bill. I was not part of the select committee process, so I’m probably going to be followed by some people who know more about it than I do. But I do have a lot to do with the industry, and I think it’s a great industry for New Zealand. I admire the Minister for trying to protect it and trying to fix it, but I don’t think this is the way to fix it. I think, were we to become the Government after the election—and I’ve counted the days; it’s 57¾ days, I think it is, or something like that, until the election’s over—we would not pursue the regulations and would likely repeal this piece of legislation. If it was necessary to put in place a piece of legislation to deal with the bits of this bill that I think are useful, we would probably do something about it. So we can’t support this bill, for that reason, but I do think the industry is worth the effort that we put into trying to make it work.

The very last thing I want to say is—and I have mentioned it already tonight—the moment Governments start to mess around in what, effectively, is a market situation, we almost always get it wrong. We’ve seen numerous examples of that in the past. So we cause distortions in the market place, and I talked about that earlier in my speech. We cause distortions in the market place, which create uncertainty, which get results that we don’t anticipate getting and cause problems for us. Thank you, Mr Speaker.

Yes. Mr McKelvie, you are going to be followed by someone who knows more about this than you. I want to just rebut—

💬 SPEAKER: Order!

What? Pardon, Mr Speaker.

💬 SPEAKER: “You”.

The previous member. I’d like to rebut a couple of things that that member said. First and foremost, he said that there’s a lack of capital in the market, and that’s the reason why the industry isn’t growing. Well, I dispute that. I think one of the main reasons why people do not invest in the sector is because they cannot tie up long-term log supplies. When you’re investing a couple of hundred million dollars in a plant, you need to ensure long-term log supplies. That is really important.

It’s a real shame the National Party isn’t supporting this bill, and it’s good to see Minister Shane Jones actually taking a great interest in this. He’s the first Minister of Forestry this country has had since the Hon Jim Anderton who understood the industry and drove change. I remember attending a forestry meeting where a former National Minister of Forestry stood up and said, “I know about forestry. I’ve got a woodlot at the end of my farm.” And then he laughed, and everyone—it wasn’t you, Mr Guy. Everyone in the room rolled their eyes and went, “Oh, goodness me.” But that is about the level of interest that the National Party, a previous National Government, had for forestry, and the industry knew it.

The other thing I would like to talk about is—Mr McKelvie talked about roundwood. The reason why there is a shortage of roundwood at the moment, and the reason why I have a major concern around what’s happening in our industry, is because of a lack of silvicultural regimes. In the past, roundwood came about because people were growing for production and they were thinning, and they got a lot of poles out of thinnings. They weren’t growing specifically for poles; they were growing for 23-, 25-, 28-year-old wood, and, at 18 years old, you’d thin your forest out, and that’s where your roundwood would come from.

New Zealand is quite unique in the sense that about 75 percent of our forests are overseas-owned, and that does create challenges. What I would say is that when we become involved in this, we are not distorting the market. In fact, what we are doing is correcting the market.

Let me give the House an example—let me give the House an example. There’s a forest in Gisborne. It is called Hikurangi Forest Farms and it was overseas-owned. It’s since been sold to the example I’m going to give. What happened with that forest is the owner trucked logs straight past the front gate of a local mill that was part-owned by the Gisborne economic development agency and sent those logs to the wharf and straight overseas. That forest owner refused to supply logs to a local sawmill to the point that that sawmill closed down. The thing about Hikurangi Forest Farms when it was owned at the time is it put three applications into the Overseas Investment Office, making a whole lot of promises around what it would do. It never met one of those promises.

When I used to sell logs to sawmills, and I did this for Carter Holt Harvey, the thing that I know is not one sawmiller ever asked for a special deal. They never asked for a price that was cheaper than the forest owner could achieve overseas. What they did want is export equivalent log price. That is all these guys are asking for—not a special deal, not a special price, just a quality and a quantity of logs that allows them to operate at an export equivalent log price. What we have seen over the last 10 years is foreigners not supplying mills with logs but rather sending them overseas.

Now, don’t get me wrong, there are a number of very good forest owners who are overseas corporates, and the example I have given, whilst not unique, is a little unusual. Most of the forest owners in this country, be they domestic or overseas-owned, actually do the right thing, and they do supply logs to mills. But what Mr Jones is doing here is ensuring that our domestic mills do have a supply of logs so they can operate—not at a special price. That has never been part of this bill, and it was a red herring put up by the industry, and also, I believe, by the Opposition. There is nothing in this bill that says “Thou shalt supply logs to the domestic industry at a cheaper price.”—at a cheaper price.

The other thing I would say, with regard to the registration of log traders, is there is something called the New Zealand Institute of Forestry, which is a very reputable body; it does a fantastic job. It actually already administers a registration system of sorts that would be perfect for undertaking the registration of log mongers. That is set up. It is not a difficult thing to do. The last thing I would say: it is good to see a Minister of Forestry taking a real, true interest in this, protecting the rights and the commerce of New Zealand processors and driving the forest industry forward in a way that hasn’t been done for a number of years. I support this bill, thank you very much.

Thank you, Mr Speaker. Well, the Minister who’s just resumed his seat, I think, has given us the answer that we had been seeking for so long through the select committee process, third reading, the committee of the whole House, through the second reading, and now into the third reading, and the answer that the Hon Shane Jones, whose name this bill is in, didn’t answer. What we found from the member Stuart Nash is that we are correcting the market. That’s what it’s all about—we are correcting the market. This is what we said: we’re correcting the market. Now we’ve got to the nub of it. Here we are in the third reading of this legislation, and now we’re at nub of it. He wants to correct the market.

That was the challenge, actually, that came from all the submitters—so many of them that made submissions in such a short time, because this bill was introduced under Budget urgency, and then the Environment Committee had a very, very narrow window of opportunity and a short time frame in which to consider the bill. It was clear right from the very first few submissions that there were major flaws with the bill. Big chunks of it were rewritten by the hard-working officials, who had to try and make some sense of it, and now we find out the answer to the question: it’s all about correcting the market. That was the question that submitters were asking us at select committee—they were saying “What’s the purpose of this bill? What is it aimed to do? Why has it been introduced? What is the purpose?”

Then halfway through that process, we discovered, actually, that the intent of the bill is more to do with propping up a handful of inefficient, maybe unprofitable sawmills, mostly in Northland, and that a better name for this bill would be the “Northland Inefficient Sawmillers Support Bill”, because that’s really what it sort of came down to. Loggers and foresters from the sector couldn’t understand what the issue was, and then there was the sense all the way through that there was some kind of Trojan Horse, that there was some kind of purpose beyond what was stated on the label of this bill—what it was all about. Now the Hon Stuart Nash has given us the answer that we have been seeking for so long and that wasn’t forthcoming. “We are correcting the market.”, he says.

💬 Erica Stanford: What could possibly go wrong?

That’s the way that socialists work—that’s the way they work. As my friend and colleague Erica Stanford from East Coast Bays says, “What could possibly go wrong?” Well, wait and see—just wait and see. When Governments dabble in a free and open market, when they dabble in areas that are rightly and properly the preserve of property owners to make their own decisions about what they do on that property, what trees they plant, what varieties of tree they plant, and, what’s more, when and how they log them—well, when they cut them down, at what level of maturity. Those are commercial decisions, and then decisions about who they will sell those chopped-down logs to, those felled logs—“felled logs” is the right term. So these are all crucial matters that are properly and rightly the preserve of the property owner, of the business person, of the entrepreneur. This is not the realm of the State; this is not the realm of a clipboard-carrying registered adviser.

There are provisions in this legislation that are very scary for property owners, for foresters, who feel very much that this bill will inhibit their freedom and ability to make commercial decisions on their own account, on their own advice, or from advice that they have received from people that they choose to seek advice from, rather than those that are regulated and controlled and told what to say by this piece of legislation that this Government wants to use to correct the market. Well, Erica Stanford is 100 percent right: “What could possibly go wrong?” Well, years and years of experience have taught us that when Governments attempt to try and correct the market, only ill will come from that.

Actually, the perverse outcomes of this legislation will not be a better outcome for the logging sector, it won’t be a better outcome for sawmillers, and it won’t be a better outcome for the economy of New Zealand—and we will all be the poorer for it. So a Labour Minister who comes to the House in 2020, talking about correcting the market—I thought that kind of comment went out back in, well, frankly, about the 1970s, it went out, but no; it’s alive and well on the Government benches right now.

We don’t support the bill. The very wise words of my colleague Ian McKelvie, I hope the Minister was listening to—I hope the Minister absorbed the wise words of Ian McKelvie, because he is a man that is experienced in these matters, he understands it, and I thought his contribution in this debate was well worthy of consideration by the Minister. We don’t support this bill.

Tēnā koe, Mr Speaker. Thank you. The National Party hates regulation. The National Party appears to dislike the forestry industry. We have a system with real estate agents who are licensed to practise. What this bill does—and the Green Party is very pleased to support it—is set up a forestry authority which is going to have oversight of a registration and licensing system.

What National has been talking about in its reasons for opposition fails to recognise that there are failures in the market, fails to recognise that the bulk of the wood supply in the 2020s is going to be from small growers. It fails to recognise that a lot of those small growers, the decision they make about when they harvest the timber on their land and how they market it will have quite an impact on the return they get from it. Having not had a lot of experience in that space, if they are taking advice from log traders and others who are not registered, they have no assurance about the integrity of that advice. So this bill, and the licensing and registration system that it puts in place, is about ensuring that the industry has a better future. It is about ensuring that those small forest growers have got access to people who have appropriate expertise and qualifications, and that we can make the best of that timber.

As the Hon Stuart Nash noted, where you have got big companies that are primarily interested in supplying overseas markets, they can sell timber directly to those markets, it goes on to the wharves, and it may mean that local sawmilling and wood-processing companies miss out. The bulk of the logs that are harvested here in New Zealand are sold as logs overseas, without the added-value processing that we can use in this country to create jobs and to make use of the climate and soils which are so good for growing trees.

The forestry industry has got a lot of work to do to lift its game to get a social licence back again, when we’re seeing the pictures that we’ve seen from Tolaga Bay, with all of that slash ending up on the beaches once again. It’s got a job to do to move away from the exotic plantation pine monoculture. It can do things as happening in Northland, where regenerating tōtara there is being harvested on farms and the return from those logs, which don’t need any chemical preservatives or treatment to make them durable, is providing an incentive for farmers to allow the tōtara to continue to regenerate rather than felling it for pasture. The industry needs to diversify into different timbers, into native plantation timbers, and not just rely on pine.

This bill is a step towards ensuring a better industry by having a registration and licensing system, and the forestry authority to oversee that. So I can’t understand why the National Party is so afeared of that when it has been, alongside 50 Shades of Green, raising concerns about areas of pastoral farmland which are being converted to plantation forestry. Here you have mechanism, through this bill, to ensure that farmers who have woodlots, those small growers, are able to access advice that is experienced, from licensed people, and yet the National Party opposes that. They don’t want a healthy industry; they don’t want regulation to ensure that the forestry industry has a better future. The Green Party supports the Forests (Regulation of Log Traders and Forestry Advisers) Amendment Bill.

The forestry industry already has a healthy industry, and log traders have a very strong part of that. We were told through the very imperfect consultation period of this bill that the Government appeared to be looking for a solution to a problem that doesn’t actually exist. We had a number of points noted to us throughout the submission process, which was overwhelmingly against the regulation and the requirements which come with the provisions in this bill. For the Minister in the committee stage, the Hon Shane Jones, to note that on behalf of the submissions on the bill, this was a relatively uncontroversial process—that could not be further from the truth.

We were overwhelmingly told, across a range of interests in forestry, that there was simply an absence of an argument for the necessary imposition of future regulation on the forestry industry. They did acknowledge that there are some players—log traders, for example, and foresters—who were suboptimal and didn’t provide good advice. Well, point me to even a regulated industry where that is not the case. But, overwhelmingly, we were told that there was no great problem that they could identify—nor could the Minister identify—that needed remedying throughout this bill.

Just my final point is that, yup, National doesn’t like regulation, because with regulation comes cost and uncertainty and it diverts New Zealand business from doing what it wants to do, and that is getting on and being productive. I would have thought that in these post-COVID economic times, we needed foresters and every other business—large or small—in New Zealand focusing on their business, not focusing on a new raft of regulation that is going to come down on them. Thank you.

Thank you, Mr Speaker. I’m pleased to take a call on this bill this evening. If ever there was a bill that was a solution looking for a problem, it’s this bill. I have to, firstly, tonight mention the chair of our select committee, Duncan Webb. He had a tremendously difficult job with this bill, and I have to say he asked more questions probably than even we did. His frustrations with this bill were absolutely clear in the fact that we had to keep pushing things out, allowing for more time in the very restricted time we had, because the bill was such an absolute incoherent mess. We had a really restricted time frame to do this in, and the frustration on the face of Duncan Webb was like I have never seen before. It took a long time and a lot of Zoom calls between us and officials, and I have to pay great respect to them because they worked really hard in a very short time frame to get this bill in some kind of a state that we can present it tonight.

We will be voting against this bill, as I think has become abundantly clear. It was so—I have to say—arrogant of Minister Stuart Nash, the Hon Stuart Nash, to come out tonight and say that we had no idea what we were talking about, that he knew everything, that it was all about correcting the market. Well, actually, I might not have any log traders or any of that industry in my electorate, but I sat on the Environment Committee and I listened to every single one of the submitters, and 95 percent of them were against the bill. No matter what the Hon Eugenie Sage talks about—failures of the market—not a single one of them came to us and said there is some great failure of the market that there has to be this intervention to correct it.

The only place where possibly there was some kind of evidence of that was in Northland—a couple of sawmills that hadn’t been invested in, that weren’t talking to the forestry owners properly, and that is where the problem lay. Not a single person around the rest of the country told us that there was a problem. The really interesting—and I know we always talk about submitters in the second reading, but I have to always come back to the one, New Zealand Forestry, who said, “Look, it’s OK if you have a registration programme for the industry. That’s not a problem. We’re happy with that.” But the point he was making was that isn’t the solution for the purpose—one of the purposes in the purpose statement is to “support the continuous, predictable, and long-term supply of timber and equity of access of timber for domestic processing and export.” Those two things—you know, one of those didn’t equal the other. What he was trying to say was you can have a registration process for the industry, but you’re not going to achieve that purpose.

So that is why every single one of the submitters that we saw saw this as a Trojan Horse and realised that to achieve that purpose, supporting the continuous, predictable, and long-term supply of timber—that purpose was going to be achieved by something that was hidden in regulations that they hadn’t seen. Then for the Minister to come up today in the committee of the whole House stage and say, “Don’t worry. We’re going to consult widely over these regulations. We’re going to talk to the industry. They’ll have the chance to talk to us. And when we develop these regulations, it will all be OK and it’ll all be fine.”—I made the point back to him that, well, actually, you could forgive them for thinking that’s probably not going to happen, given that it didn’t happen with this bill. They were completely blindsided. It was rushed through under urgency. They only had four working days to submit on the bill, which is atrocious. The state of the bill was appalling anyway. For them to understand it, respond to it, and come and then talk to our select committee in such a short time—every single one of them complained about the process, complained about the fact that they had no idea that this was coming down the pipeline. They hadn’t been consulted with. Then for them to sit there now and believe that the Minister is going to consult with them widely when it comes to regulations—if they’re watching, they’re probably sitting there thinking, well, that’s probably not going to happen.

I mentioned also in the committee stage about the fact that the regulatory impact statement also mentioned the fact that there wasn’t proper evidence or there wasn’t a longitudinal study that could be relied on for the basis of this bill. In fact, they talked about the only research that had been done, in fact, was “MPI commissioned Forme Consulting Group and Scion in early 2019 to examine the log supply constraints that were emerging in”—which part of the country? Northland—nowhere else but Northland. So the only bit of evidence that they have is from Northland, where there are some sawmills that haven’t been properly invested in that aren’t doing so well. But what we heard from the rest of the country is that there isn’t a problem. We heard from sawmills, we heard from processors, we heard from log traders, we heard from growers, and no one said that there was a problem, and they were all confused by the bill. So you have to agree with them when they said there has to be something hidden in this bill that we’re not seeing.

For the Minister to dismiss that when he was in the chair tonight is just not good enough. Every single one of them said, “This is a Trojan Horse.”, after they complained about the fact they hadn’t had very long to go through the bill and submit. The next thing they said was that in order to achieve the purpose of the bill, there’s got to be something hidden. That’s why they called it a Trojan Horse.

As my colleague Scott Simpson mentioned earlier when he talked about the Minister, the Hon Stuart Nash’s comment about the correction that was needed, it just rang these alarm bells, because, as I pointed out, what could possibly go wrong? There is a reason that we don’t intervene in these markets, especially when the people themselves, the stakeholders themselves, and the growers and the processors and the sawmills are telling us that there’s not a problem and there doesn’t need to be intervention. But this Government, for some reason, believes there is a problem and that the solution lies in this complete incoherent mess of a bill with a hidden agenda. For that reason, we will not be supporting the bill this evening.

💬 Hon Stuart Nash: Stick to the North Shore issues.

That was uncalled for.

💬 Hon Stuart Nash: But it’s true.

💬 Hon Nathan Guy: Mr Speaker?

I missed it. I’m just going to check that it wasn’t an unparliamentary remark.

💬 Hon Stuart Nash: No, it wasn’t.

OK. The Hon Nathan Guy.

Thank you, Mr Speaker. I’ll ensure that I don’t put you to sleep with my contribution. Regardless of that, this is a very—

💬 SPEAKER: Don’t indicate to your colleague who just spoke that she did, because she certainly didn’t.

This is a very important bill and it’s worthy of a good, robust third reading speech, which I’m going to do. But I don’t have a lot of time to deliver a good, robust speech, so I’m just going to run through the highlights for me. I sat on the Environment Committee and heard this bill; it was very rushed. Erica Stanford did a great job of covering that off, so I won’t go through that process. But I think what we can glean is that the Minister of Forestry started at a point where he wanted to create an export levy on logs leaving the country. He couldn’t get that through Ministry for Primary Industries (MPI) officials or the Ministry of Foreign Affairs and Trade (MFAT). They all went ballistic—hated the idea of it. It was all redacted in the regulatory impact statement. So he did a workaround with his officials and he came up with this.

We still have concerns about this bill, and what this does is it means that it will restrict export logs and mean that a portion of those have to go into the domestic mills in New Zealand, and we don’t think that that is fair and proper. I heard Stuart Nash in his contribution say that the market’s broken and it isn’t working. Well, that’s not what I’ve heard from my mates in the industry. So it’s interesting that he is referring to that. I’m not sure where Stuart Nash is getting his information from, because he does have a lot of large foresters in his electorate.

The other aspect that this does is it forms a regulatory body to oversee the forestry advisers, and that will create red tape and costs, and I don’t think that there’s a massive issue for them to necessarily be regulated. The other aspect that I have real concerns about—and we, unfortunately, got blocked in the select committee from getting MFAT officials in to interrogate them on whether this bill could have consequences for the New Zealand Government—i.e., MFAT—negotiating a free-trade agreement (FTA) in the future, whether it’s the EU, whether it’s the UK, or other countries that we’re working collaboratively with to try and get FTA agreements. What we do know post-COVID is that there is more protectionism coming in around the world. It was the worst prior to COVID in the last 23 years. So we know now it’s probably up to being the worst in 30 years.

We know from all of the evidence from the Government that, currently, agriculture exporters face non-tariff barriers that cost them about $6 billion a year. That is a huge amount that’s not flowing through back to the farm gate, back to growers, back to foresters, and the like. So my concern is that—and I know that MFAT officials share this concern, but I’ve got that second- and third-hand because we weren’t, unfortunately, given our right to have them in front of the select committee. So we only got advice from MPI trade officials, and I wanted to hear it from MFAT. So what I have heard second- or third-hand is that MFAT are really worried about this bill and it could cause complications with us negotiating free-trade agreements in the future. We’ll wait and see on that one.

The other one that I asked the Minister about was the ability to effectively set up a code or standards in the future. That all sounds fine, doesn’t it? But there’s an aspect in this bill that really concerns me and that is around the sustainable land use where, potentially, forestry advisers will be the ones that could get caught in the crossfire for saying “This block of land is appropriate for trees.” and in due course it may not be. The real rub—not in this bill, but generally in forestry, in the primary sector, and rural heartland New Zealand right now—is that they see, literally, a sea of trees coming at them hard and fast. That means, potentially, there’s the hollowing out of rural communities: rural schools closed because the teachers might be hooked up with the farm manager, the shepherd who has to leave because their farm has been sold to forestry, the rugby club goes, the veterinary club goes, and it’s a downhill spiral. By the way, the roads get smashed in 25 to 30 years’ time. So we’ve got a real concern about the aspect of the sea of trees that is actually hitting rural communities quite hard right now.

But the reason I raised that aspect about the sustainable land use and forestry advisers is that I have a concern that the Minister of the day could bring in standards or a code that then puts those forestry advisers in the line of fire. The way that, in the future, I could see there being a real balance where we plant trees in the right place at the right time, etc., etc., is to ensure that steeper hill country is planted, but then there’s a real issue about harvesting those trees in the future—and we see right now a live example of slash on the beaches at Tolaga Bay. The forestry sector will say, “Oh yes, well, that’s under the old rules. We’ve ship-shaped up and we’re a lot better dressed now.” But the reality is we’re still going to have massive weather bombs in this country, significant rain events, and that means that slash, which is basically unwanted trees, comes down the river channels and ends up on the beaches. I’m horrified to think that the forestry industry is saying, “Oh, yeah, we’ll get on to it and we’ll clear that particular beach at Tolaga Bay leading into the summer.” I would have thought that their social licensing would have meant that they wanted to get the loaders and the trucks down there and clean it up now.

Anyway, in summary, I said, Mr Speaker, I wouldn’t put you to sleep, and I hope I haven’t. This bill is something that we can’t support. There’s a few aspect in the bill that we think are worthy of us supporting. But in summary, the aspects that I’ve outlined mean that we can’t support this bill.

Thank you, Mr Speaker. Well, this is just another example of Government knows best, and, actually, no one’s ever going to convince me that any Government knows better than an industry. So this Forests (Regulation of Log Traders and Forestry Advisers) Amendment Bill, in its current form, risks being excessively burdensome. I actually worry about what I’m hearing from my colleagues that sat on the Environment Committee. We have select committees for a reason. We have select committees so that the public and the industry can come in and tell us what is good and bad about a piece of legislation that’s going to be introduced.

The forestry sector has said they simply don’t want this bill and they view it as a means to pinning down the industry. In fact, the Forest Owners Association has labelled this new bill as an avalanche of clipboards. And what do clipboards do? They don’t enhance an industry. All they do is bog it down in red tape. We’ve heard tonight from the Green Party that the Nats don’t like regulation. Well, we don’t like over-regulation. There are some regulations—baseline regulations—that we need in any industry, but, actually, the only thing that is ever going to fix any industry is the industry itself.

So this bill was introduced in urgency. It was dropped on us just after we got back to Parliament, out of COVID. I think we were only at half capacity at that point. We weren’t all back. This is only the second sitting block where we’ve been all back. There were, out of 640 submissions, only 11 that supported the bill, meaning almost 98 percent of submitters opposed it. If I can say to the Minister, well, 640 minus 11 is 629 people opposing this bill. Now, what I don’t like about that is that shortened legislation can end up having unintended consequences. Shortened legislation is bad legislation.

I’ll give you an example. So oil and gas shortened legislation—Jonathan Young, my good colleague, and I tried to get a select committee day in Taranaki, the heart of oil and gas. But no, you know, the Government doesn’t want to hear what Taranaki people have to say about oil and gas. Well, Jonathan Young’s just informed me recently that there’s a new terminology out there and it’s called non-gas thermal capacity. That is code for coal, right? So now we are heading down the coal path.

So this bill is another recipe for failure by a Government who comes in, wants to over-regulate an industry, wants to know best, and wants to make sure that they have all the regulations and rules in place. I’m really disappointed, actually, that our members said the Government MPs blocked Ministry of Foreign Affairs and Trade (MFAT) officials from briefing the select committee on what the consequences of this bill could potentially have on New Zealand trade and that could negatively affect us through the World Trade Organization. Now, in my mind, any select committee that would ignore advice from an organisation, or not want to actually have a briefing from an organisation like MFAT, on a bill that supposedly is affecting trade in any industry, is just blocking its ears to what needs to be heard.

The last thing I’d say on this is that they’re talking about the shift to compulsory registration. There’s potential for practitioners with extensive industry experience but few formal qualifications to be disadvantaged. Then you’ve got the young up-and-comers coming through, who could be caught by this. It’s almost “Oh, well, if they don’t want to go down the registration path, we’ll go and find them another place here.” You know, there are some long-term people in this industry with skills, and just because they don’t have—there’s nothing wrong with qualifications. Qualifications are good, but, actually, some of these people learn from the university of life, and it just makes me mad when I see things like that. These people are going to be relatively discarded because they don’t have a qualification.

So it’s time to wake up. It’s time to show that the industry knows best, not the Government. We do not support this bill.

I often get in conversations with wool farmers who lament the lack of any coordination in the industry, which results in very low wool returns, and look for Government support to shore up that industry in some way—the same sort of support that actually will result in that same regulation around the forestry industry. So it’s a matter of a little bit of consistency here—that there is a belief that somehow Government intervention is going to be required to get the wool clip back into some sort of economic state, and yet here, when the forestry industry were attempting to do the same thing there, then it’s lo and behold, whoa, whoa, whoa. So you can’t have it every way. This is good legislation. I think history will show that it came in at a very good time. I commend this bill.

Thank you, Mr Speaker. It’s fascinating to hear that last speech from that member, Greg O’Connor, who indicated that the Government sees its role in the agricultural and primary sector as an influencer and an active participator—

💬 Greg O’Connor: Enabler, actually—enabler. Too big a word for you.

Enabler, is it? Well, see, that’s the member over there. He’s talking about regulation and coordination from the Government. That is really typical of a left-wing Government that dictates what business should do. This is what we’re seeing in this legislation here today. Industry does not need Government to tell them what to do. That is the fundamental premise of the success of the New Zealand primary industries. No other primary industries around the world are as competitive as ours, because we work off the basis of market signals.

Now, if we take this bill here and we look at forestry, the big market signal that was sent to the forestry sector when this Government came in was the billion tree promise. Then they change the Overseas Investment Act to make sure that people could come in and buy New Zealand land from overseas, against all of the arguments those Opposition parties had ever made in this House, and publicly, just so as to facilitate their promise of more trees. Now we get this legislation, which is another example of Government intervention to prop up a promise. That is inefficient, in the end, for the industry. I implore the Labour, New Zealand First, and Green members that talk big talk now about the importance of the primary industries, and they talk about how they can save this economy—the actions of that Government are doing the exact opposite. Legislation like this will make forestry inefficient. It will make forestry having to meet the guidelines of the Government of the day.

Then we get more promises, because, as my good colleague the Hon Nathan Guy registered in his last speech, you know, there is the problem of land-use change now, as forestry is being given that free ride through the Overseas Investment Act. People and communities on the East Coast of New Zealand and Wairarapa are genuinely worried around that change of land use. And yet the Government then has to come out with another promise to try and mitigate that. It’s a promise that has no basis. They were talking about resource consents for councils—having to do that for certain areas, classes of land. Completely ineffectual promise—will make no difference. At the same time as they are going out there trying to cover their tracks through another promise, then they actually have to create a new problem. That is what we are seeing time and time again in the forestry industry. So just in those four examples, you can see how the forestry sector of the New Zealand economy is being distorted by this Government.

The decisions being made are being made on the basis of currying favour with the Government. For example, can you seriously see that those councils that will have to dictate those resource consents would say no, when at the same time they’ve got Ministers coming to their areas with buckets of money for Provincial Growth Fund applications? The forestry aspect of it is a big part of the Provincial Growth Fund—

💬 SPEAKER: Just saying “forestry” doesn’t get the member into the bill, all right? The member has got to speak about the bill.

Well, the bill is the regulation of log buyers and forestry advisers. It’s another one of those examples that I’m pointing out where the Government has tried to protect its political promises and, in doing that, has distorted the total market. That will be to the detriment of the forestry industry over time. That is why a Government made up of left-wing agendas and political promises like the New Zealand First Party can never be in charge of business, because they do the exact opposite—

💬 SPEAKER: Order! Order! Second warning now. Back to the bill, or I’ll terminate the member’s speech.

That is why a Government like that cannot be in control of this economy. I understand your concerns about the bill, but the fundamental problem in this legislation is that it is a distortion that is to back up a promise that has been made to a sector. That is the fundamental reason we are having this bill in front of us. We’re not having this bill in front of us from any economic analysis that’s come forward and said it needs to happen. This is only coming forward because of a political promise that’s been made, and they can’t make it work, and so they have to change the rules around that sector time and time again to try and make it work. That is the nature of this bill. It is the fundamental premise of why we are having this bill, and in this House, we should be debating the fundamental principle behind the legislation. That is the important part of why we are here today. So I encourage the Government to act in a principled way and to work with the sector, not by creating promises and then having to make a series of regulations to enable those promises to happen, because they are going in a cycle of more and more promise. Thank you.

I commend this bill to the House.