NZ Prime Minister Bill English
New Zealand elections always bring together some novel alliances. The 2017 Election to be held on 23 September is no exception on this front for WPMA. Source: Timberbiz
For this general election the Wood Processors and Manufacturers Association of New Zealand (WPMA) has worked up an alliance between the wood, metals, plastics and manufacturing exporters’ associations to deliver a joint policy position to all political parties.
While there is a diversity in the materials that form the core of the businesses they are united in that they are manufacturers and face very similar challenges in the processes of adding value to commodities.
Up front in this NZ Manufacturing Industry Alliance Policy Position (2017) is the biggest concern WPMA has been pressing home with politicians for months – that of unfair competition creating trade distortions for NZ manufacturers both at home and abroad.
All of NZ manufacturers are up against subsidies overseas but the wood industry feels this particularly acutely as this creates unfair competition in the domestic log market.
The Manufacturing Industry Alliance calls on the NZ Government to implement WTO-compliant trade remedies to level the playing field.
The Policy Statement also requires the incoming government to put in place an R&D tax credit system that is far more encompassing across the manufacturing industry and to implement an accelerated depreciation regime to enable companies to access the very latest manufacturing technologies and know-how.
The Policy statement requires government to address the skills shortages in the manufacturing sector.
There has been a disproportionate focus to date on skills for the primary sector. This now needs to be a re-balance to address the needs of manufacturers who are running desperately short of the highly skilled workers needed to grow the sector.
According to the WPMA, the NZ wood manufacturing sector has had a much bigger public and political profile in the run up to this election. That being the case, what are the main parties saying that has direct relevance to WPMA’s trade and competition concerns.
National:
The large number of WPMA members attending the meeting with Trade Minister McClay on 16 August regarding unfair competition and trade will have heard him acknowledge the industry’s trade problems as urgent and important.
The Minister has commissioned a cross-Ministry inquiry into our grievances and this is now in its early stages. The WPMA assumes that if a National-led Government is returned week this inquiry will continue and expect the recommendations raised to Cabinet for action.
NZ First:
Wants to put in place measures to ensure that the vast majority of our raw forest products are processed in NZ. Those attending the recent NZ First Forestry Meeting in Northland will have heard the party suggest a log export quota system.
NZ First had until recently been talking about setting a “minimum domestic log price to discourage the export of raw logs”.
Whilst the specifics remain to be nailed down it is clear that NZ First will be looking at regulatory interventions in the domestic market to ensure much fairer competition in the NZ log market.
Labour:
Is focussing its attention on tightening the Overseas Investment Act to include forest cutting rights on any land area over 50ha in size. This would be a major regulatory shift as cutting rights are not controlled under the OIA at present unless the overall purchase price exceeds NZ$100 million in value.
Labour has told WPMA that in their OIA reform they would look to enforce commitments made under OIA Section 17(2) that stipulates supporting local processing.
Greens:
Have told WPMA that they will prioritise tackling production and export subsidies internationally in order to prevent the kind of trade distortions we are witnessing in the NZ log market.
They have also committed to investigating the use of trade measures to provide incentives for the domestic processing of logs.
They will also address the advantages given to foreign companies in NZ including the recent Bill on Anti-Dumping and Countervailing Duties, the lack of action on tax treatment of multinationals and the lack of strong competition policy that would include imports into NZ.
From these election promises we can assume, whatever combination of parties come to power, that the WPMA’s call for government intervention to create fair trade will receive priority attention.
The WPMA is ready to work with whoever takes the reins to ensure that this is the case.
