Nash StuartHon STUART NASH (Minister of Police): 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!Hon STUART NASH: What? Pardon Mr Speaker.SPEAKER: You".Hon STUART NASH: 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."