Cunliffe David: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeCunliffe David: Questions for Oral Answer — Questions to Ministers[Sitting date: 19 March 2014. Volume:697;Page:16811. Text is incorporated into the Bound Volume.]3.Hon DAVID CUNLIFFE (Leader of the Opposition)to the Prime Minister: Does he stand by his statement that the forestry industry “needs significant change”?Hon BILL ENGLISH (Acting Prime Minister):Yes although the member may need to be reminded that that statement was made in response to a question relating to forestry safety systems not the economics of forestry.Hon David Cunliffe: In relation to the economics of forestry is he comfortable that the rate of unprocessed log exports has grown at 10 times the rate of processed logs given that the export of raw logs is really exporting jobs?Hon BILL ENGLISH: I would need to check the member’s figures but he may also be interested to know that around 60 percent of all forestry production is currently value-added. It may well be that in the light of a rise in prices for export logs there are more logs being exported but anyone who has been in the industry knows that those prices can drop as fast as they rise. I am sure that there are many people in the forestry industry taking a longer view and keeping that in mind.Hon David Cunliffe: In relation to the Minister’s claim that 60 percent of timber exported is value added I seek leave to table Ministry for Primary Industries statistics that show that 55 percent is exported raw.Mr SPEAKER: Leave is sought to table some Ministry for Primary Industries statistics. Is there any objection? There is none. They can be tabled.Document by leave laid on the Table of the House.Hon David Cunliffe: Is it appropriate to export raw logs to Asia and import the sawn timber back to Christchurch when sawmills are closing in New Zealand for example with 120 people having been sacked at Tachikawa Forest Products sawmill in Rotorua?Hon BILL ENGLISH: It would be useful to public debate I am sure if the member could provide an actual example that that was the case. Secondly—Hon Members: He just did.Hon BILL ENGLISH: No he did not—he did not. He asserted it—he just asserted it—but of course we need to remember who is making the decisions about this and it is the owners of trees the owners of sawmills and traders in timber all of whom we believe are probably better placed than David Cunliffe to make that judgment.Hon David Cunliffe: What would the Prime Minister say to the people in the Deputy Prime Minister’s former home region who are gutted by the announcement that Southern Cross Forest Products is in receivership threatening up to 400 jobs across its sites?Hon BILL ENGLISH: There have been public statements made to the effect that the mill may be sold as a going concern and that in fact a problem is levels of debt rather than levels of log exports.Hon Dr Nick Smith: My question to the Minister of Finance is: what reports has he seen on the—[Interruption] To the Acting Prime Minister—Hon David Cunliffe: I raise a point of order Mr Speaker. I seek your guidance Mr Speaker. Is it appropriate for the member to ask a supplementary question of the Minister of Finance on a primary question that was to the Prime Minister?Mr SPEAKER: Yes. No it certainly is in order to do so—Hon David Cunliffe: To a different member? The primary question was to the Prime Minister. The supplementary to that—Mr SPEAKER: Oh I see. I gather the point. No it is appropriate that the member when he rises addresses the question to the Prime Minister.Hon Dr Nick Smith: My question is to the Prime Minister and it asks what reports has he received on the recent developments in forest processing in Tasmania where its Labour-Green Government has fallen apart over the very issues of forest processing and where there has been a huge loss of jobs and confidence in that sector because the—Mr SPEAKER: Order! You have made the point with your question.Hon BILL ENGLISH: I have received the same—[Interruption]Mr SPEAKER: The question was what reports has he received.Hon BILL ENGLISH: The Deputy Prime Minister and the Prime Minister have received the same reports obviously which have been to the effect that the Government in Tasmania has overseen the destruction of the forestry industry by trying to get involved in it.Hon David Cunliffe: Would the Prime Minister support an accelerated depreciation tax including for forestry processing?Hon BILL ENGLISH: No we are not entertaining that. Those kinds of policies were tried consistently I think from the 1970s when they were a bright idea and they lead to unsustainable industries and unsustainable jobs as a whole lot of Australian workers are now finding out where industries that were subsidised by the Government there are now closing down.Hon David Cunliffe: I seek leave to table a global tax alert from Ernst and Young that shows that far from the Minister’s point Japan—Mr SPEAKER: Order! [Interruption] Order! The document has been described adequately. I just need the date of the document.Hon David Cunliffe: It is 4 October 2013 not—Mr SPEAKER: It is a recent document. Leave is sought to table that particular Ernst and Young report. Is there any objection? There is objection.Hon David Cunliffe: I seek leave to table a research report from the Federal Republic of Germany that shows that it is investigating the use of a tax depreciation allowance for timber processing.Mr SPEAKER: The date please?Hon David Cunliffe: 2014 Mr Speaker. Sorry 2012 but not—Mr SPEAKER: Leave is sought to table that particular research. Is there any objection? There is objection.Hon David Cunliffe: Does the Prime Minister support a pro-wood Government procurement strategy to assist jobs and value added in New Zealand including in those South Otago sawmills; if not why not?Hon BILL ENGLISH: No. The member should have more confidence in the forestry industry. It has evolved from the time in the late 1980s when sawmillers used to be able to get very cheap logs from Government-owned forests through to a modern processing industry that is internationally competitive and makes very sophisticated decisions about the balance of financial risk different types of product and exchange rate and price risk in export markets. The idea that Labour would do a better job of that is wrong and it would end up destroying the forestry industry if it gets that involved in it.Hon David Cunliffe: Why has the Government sat on its hands for the last 5½ years while the timber processing industry has been in decline and while dozens of workers have been killed or maimed in the forestry sector—or is that just another example of this “she’ll be right” attitude to regions and jobs?Hon BILL ENGLISH: The answer to that of course is no. The industry is not shrinking; it is growing partly because of the high prices for its product. It is a bit of an odd analysis that says that because there are higher prices for the product from an industry the Government therefore needs to interfere with it. Of course the Government has acted on the serious and legitimate safety issues in the forestry industry through supporting an industry-led inquiry and setting up WorkSafe New Zealand.Dr Russel Norman: Is the Minister aware that the forestry industry and timber industry itself is calling for a partnership with the Government to help the industry value-add more rather than simply exporting raw logs or will the Government continue with its attitude of “whatever”?Hon BILL ENGLISH: It may come as news to that member but sometimes businesses do ask Government for tax breaks and other concessions. In fact it goes on all the time. The forestry industry does not have any particularly special role in that respect. The Government is working with the forestry industry on better infrastructure a more competitive energy market better regulation and a better flow of skilled young New Zealanders into the industry all of which are proven ways in which Government can support this industry.Hon David Cunliffe: I seek leave to table a report from the Southland Times about the Government subsidy—Mr SPEAKER: Order! That information is easily available to members.Hon David Cunliffe: I seek leave to table the Auditor-General’s report on the Government—Mr SPEAKER: Order! That is also freely available to members.