19th June 2023 Newsletter
PRESIDENTS COLUMN
The past fortnight has brought forth significant policy announcements from both major political parties, which aim to impose certain limitations on us. These measures appear to be driven by reactions to the recent 'slash' issue and mounting pressure from farmers, particularly those from beef and lamb. Unfortunately, both parties have let us down as they had promised to keep us fully informed of their intentions, which they have failed to do.
In case you haven't heard about these policies, here's a brief overview. The National Party has announced restrictions on new planting, including a prohibition on planting on class 1-5 land. They propose a maximum of 15,000 hectares per year for class 6 land, with no limits on class 7 and 8 land. Additionally, they suggest only 25% of a farm may be planted if it falls within land classes 1-6. These proposed numbers fall well below the Climate Change Commission's recommended budget of 32,000 hectares per year. It appears to be a strategic move to secure the support of beef and lamb farmers and the 50 Shades of Green vote. However, the logic behind the proposed limit of 15,000 hectares is unclear, and the unlimited planting on class 7 and 8 land seems to push us back into highly erodible areas, with the potential effects witnessed during cyclone Gabrielle.
On the other hand, the Labour Party has announced plans to effectively reverse the NES-PF (National Environmental Standard for Plantation Forestry). They aim to empower local councils to determine which land can be utilised for plantations and carbon forests through the resource consent process. Peeni Henare stated these changes aim to ensure the "right tree in the right place," with fewer pine forests planted on farmland and more on less productive land. I have reservations about this approach as it raises questions about who decides what constitutes the "right tree in the right place." Furthermore, local councils may lack the expertise and funding necessary to effectively oversee new resource consents for planting.
In addition to these policy developments, the Climate Change Commission (CCC) has proposed decoupling forestry NZUs (New Zealand Units) from the market. This move could potentially devalue NZUs to only a third of their current worth.
As a consequence of these policies we may face significant challenges in meeting our climate change commitments, potentially necessitating the purchase of units from overseas. This situation would effectively send our hard-earned capital out of the country. National's proposed limit of 15,000 hectares alone would conservatively cost taxpayers around $180 million over three years, representing the expense of purchasing the required units from overseas.
I strongly encourage each and every one of you to engage with your local members of parliament to express your concerns about these policies and highlight the imprudence of these decisions, particularly concerning climate change. These policies could result in a capital flight from New Zealand to other countries, as potential investors, and perhaps even existing ones, perceive frequent policy changes and excessive uncertainty in our country.
In other news, I want to remind you our Annual General Meeting (AGM) and awards dinner are just around the corner, scheduled for the 8th of July. I urge all of you to attend and take advantage of the continuing professional development (CPD) opportunities available before the event. During the AGM, we will propose several rule changes, so it's crucial you have your say.
Furthermore, I am delighted to announce some administrative changes within NZIF. The Council has approved the creation of a new administrator role for the Registration Board, which will be filled by Raewyn. Consequently, we were in need of a new person to fulfill the administrator role, and I am pleased to introduce Veronica Bennet, who has accepted the position and will commence her contract next week. Both roles will have their respective areas of responsibility, but they will also provide cross-over support when one is absent. Both Veronica and Raewyn will be present at the AGM and awards dinner, so please take the opportunity to introduce yourselves if you attend.
Lastly, the Ministry for the Environment (MfE) has announced they will be initiating a consultation on the Emissions Trading Scheme (ETS) today. While the exact details are uncertain at this point, it is worth noting Maori groups have expressed discontent and even resorted to legal action to halt the consultation process. We will keep you informed about any developments on this matter.
Thank you for your attention and ongoing support.
Best regards,
James
