I think the sale is well worth discussing, not because I think anyone is
going to rush in with troops or that there is necessarily any conspiracy,
but because the stated rationale for the sale doesn't appear to hang
together very well. I also think that the timing of the sale is unfortunate.
Hon Bill Birch, Minister of Finance has stated publicly that the sale is
required because it will stimulate investment in processing. It is
well known that much of the wood from Kaingaroa is already processed
before it is exported. In addition, while there have been a couple of
successes in sales of state forest cutting rights stimulating investments
in processing, I think it's also true that some sales have accelerated
the export of logs, as buyers have sought to make good on their
investments in cutting rights.
The timing is unfortunate, as world wood prices are not exactly bullish
at the moment, and we might get a higher price at a future peak in the cycle.
So what is the real rationale for the sale of cutting rights? Two
possibilities spring to mind:
1) Hon Bill Birch needs to pay off some foreign loans in a hurry in order
to meet his own criteria for a reduction in taxes. He would like to have
the first round of reductions before the election later this year,
because this might buy some votes.
2) The govt simply feels that forests should be in private hands as a
matter of principle. NZ has a vocal minority that thinks the government
shouldn't do anything apart from provide for crime control and national
security.
I can't know whether these are the real reasons, but they are certainly
more likely than the stated reasons IMHO.
Has anyone else an opinion on the matter?
Regards,
Euan
BTW - These are my own views, and do not necessarily represent the views
of the School of Forestry
==================================================================
Dr Euan G. Mason Silviculture, Modelling and
Senior Lecturer Decision-support systems
School of Forestry
University of Canterbury New Zealand's professional
Christchurch, New Zealand Forestry School
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