Prosser Richard: Budget DebateText is incorporated into the Bound VolumeProsser Richard: Budget Debate[Sitting date: 27 May 2015. Volume:705;Page:4059. Text is incorporated into the Bound Volume.]RICHARD PROSSER (NZ First): Another year has passed and the Minister of Finance has delivered yet another Budget—another bland helping of not very much. This Budget will not go down in history as one of the great Budgets. It will not be remembered in the same way as the Black Budget or the “mother of all Budgets” are remembered. In fact if the Budget is to be remembered for anything if it is remembered at all it will not be for what is in it but for what is not in it. It may go down in the history books as the “great dull beige Budget of 2015”.In terms of what is not in it as far as the forestry sector is concerned there really is not much at all. Through the last term of Parliament I had a flat down on Thorndon Quay for when the House was in session. It was just over the road from the stadium and it overlooked the log-loading docks. Every morning on my balcony over the oatmeal I was confronted by the horrible sight of piles and piles of logs—North Island radiata pine—piling up ready and waiting for the ships to take them away to China and Korea and other faraway places where they would be turned into things. Going out with those shipments were shiploads of New Zealand’s forestry and sawmill jobs and shiploads of the potential for value-added timber products coming out of New Zealand and adding to the economy. I am not there anymore. I have moved out to the finance Minister’s home town of Karori so I do not get that sight in my face every morning but that does not mean the problem has gone away. As far as what this Budget does not contain for the forestry sector it is not going away any time soon.So the lack of any real commitment to forestry is one of the more disappointing aspects of this Budget. Expenditure on the management of Crown forestry assets is expected to fall by about $5 million on the actual versus the budgeted expenditure for 2014-15 and the appropriation for 2015-16 is down by another $15 million on that. At the same time the value of stumpage per cubic metre is budgeted to fall by about 15 percent over the next year. Indeed the market report from the May 2015 edition of the New Zealand Tree Grower magazine which is the official journal of the New Zealand Farm Forestry Association warns that the value of a cubic metre of softwood landed in China has fallen from US$130 for a JAS which is an Japanese Agricultural Standard cubic metre in October last year to about US$100 in April and it is forecast to fall to US$90 or below by the end of this month.The future for the New Zealand forestry sector and exports from it is not in the form of logs. At present there are around 5 million cubic metres of log infantry sitting on the Chinese wharves and China has effectively stopped buying. Consequently there are about a million cubic metres of radiata sitting on the docks in New Zealand that effectively have no buyer—there is no market for them. New Zealand has been supplying around 60 percent to 65 percent of the softwood log imports into China with the rest being made up by exports from the United States Canada and a few from Russia. I ask what this Government is doing in this Budget to address this problem and what incentives and what assistance it is offering the forestry sector and the wood-processing sector. The answer is between “nothing” and “very little”.There is the Primary Growth Partnership of course and there is a scheme within that programme that is developing the steep land harvester. That is a great thing and we are all in favour of the Primary Growth Partnership. It is a grand scheme a marvellous initiative and New Zealand First fully supports it. We do have one beef and that is that there is no provision for the retention of rights to a share in the intellectual property that is generated by the Primary Growth Partnership projects. That intellectual property goes to a private partner and all too often that private partner is a foreign partner. But in other regards the Primary Growth Partnership is pure socialism and we have every support for it. It is quite surprising it is being promoted by a National Government and that Labour does not seem to like it but that is one of the vagaries of politics I suppose.My point with the steep land harvester is that although it is going to be a very good thing what is the point in it if we have not got a market for the trees it is going to harvest and the wood products that can be made out of them and more to the point if we do not have the capacity to produce those wood products? The magazine New Zealand Tree Grower tell us that about 70 percent of the logs that China imports are used for making construction plywood. So the question that comes from that is: why are they buying logs? Well they are not building log cabins. If they were building log cabins you could understand the fact that we are selling them logs. In fact they are after plywood so why are we not selling them plywood? What is it that is in the Budget to incentivise and to assist the forestry sector and the sawmill sector?Brett Hudson: Has the member considered that maybe the customers want to buy logs?RICHARD PROSSER: Well they do not want the logs for the logs. They want the logs for the things they can make out of them. The whole point of an intelligent economic programme is that you sell the product that is worth the most.Brett Hudson: They’ll buy the logs from the people—RICHARD PROSSER: Listen and you may learn. The incentives are not there and this Government—