Labour promises $20m for Gisborne timber processing

Andrew Little

The Labour Party is pledging up to $20 million, if elected, to support the region's timber processing sector, possibly by helping fund a prefabricated housing plant.

Such an initiative would dovetail with Labour's KiwiBuild policy to fund construction of 100,000 affordable homes over a decade.

The announcement, by party leader Andrew Little at Gisborne's Prime Sawmill today, is the second in a series of targeted regional development investment announcements Labour plans to roll out in election year for a total of $200 million in commitments, which would only be fully spent if matched dollar for dollar by local government or private sector funds.

A fortnight ago, the party announced the first in this series: a $10 million package for Dunedin's technology sector.

For Gisborne, Little pledged that "a Labour-led government will provide a stimulus package up to $20 million to enable the construction of a timber prefabrication plant and associated infrastructure in Gisborne."

"This money will match dollar-for-dollar investment from businesses and local economic development agencies and be subject to a robust and transparent tender process," he said, citing Gisborne's mature plantation forests as a source of economic strength that was underexploited because most of it left the region as raw logs. Prime is already investing in a wood engineering technology plant.

"This funding could be used for the construction of the plant, investment in necessary infrastructure upgrades to support it or supporting sawmilling technology to help provide the lumber. What's important is that this investment underpins local aspirations," Mr Little said.

Local aspirations include reopening of the railway line between Gisborne and Wairoa, which washed out in 2012 and which KiwiRail says is uneconomic to restore to service. The Hawke's Bay Regional Council this week called on the Gisborne District Council to commit funds for a joint feasibility study into reopening the section of line between Wairoa and Gisborne. Plans are been made already for the Napier-Wairoa stretch to reopen.

Bolstering a housing prefabrication industry would also assist efforts to overcome high construction and the under-supply of homes in some parts of the country, Labour argues.

(BusinessDesk)


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Communist central planners

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Agree - it's time we cut down on socialism. The pension we're paying to millionaires is an outrage, and a good place to start.

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Great idea!

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Only if he dresses it up as part of a comprehensive Regional Development Program

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Good idea if the ventures are true joint ventures and not just donations

But not that the economic development agencies will add any value.Most are useless and run by people with no real business experience

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Awesome, didn't realised Little has building knowledge and houses can only be built using lumber, also that it can only be transported using trains. Wow, don't just call it KiwiBuild, call it KiwiTech as well.

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Good grief! What a bunch of muppets. Show me any decision from the central planners that has ever worked. The only thing that Steven Joyce has going for him is that these guys make him look like Warren Buffet.

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New Zealand's old land tax and house building programs got you an affordable house. Don't see you lamenting that.

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Land tax had absolutely nothing to do with "affordable" housing !!

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And Muldoon promised xx million to support car manufacturers. Didn't we do well?

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The housing crisis can be solved easily and cheaply by releasing more land, I doubt if timber is an issue. And if it becomes one, the market will soon solve it.

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There are obvious measures that will fix the housing crisis, but this government has put their stake in the ground saying "We don't want to see house prices come down."

We need some government who will be willing to slap a sizeable stamp duty on foreign purchases and limit them to new builds only.

A young person voting for National is a young person voting to rent till they die.

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Another xenophobic socialist "solution", which won't work. It hasn't worked in Australia. Why should it work here. The fact is that socialist land use controls have caused the problem and only their removal will solve it.

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So many dreamers out there; the rail is old horse that takes time money with no results. Have to cart to rail load unload .Still take by truck .we are a small island six hours toanywhere , truck trailer or boat n sailor the rail is a snail .Dr do little just another tourist. #

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How do you get your pre-fabricated house out of Gisborne? Rail only goes south, demand is north. Bunch of muppets, this will simply line consultants pockets. Mills (or plans for them) have come and gone in Gisborne, generally because they are not viable. If they were they would already be built.
What is really funny is the $ for $ bit says the Government will match other contributions, but those include from other agencies. Better put a business plan together, can probably get 75% of a plant funded from other peoples money. Skim enough profits off for a few years and then walk away.
For those not from Gisborne, Prime Sawmill went belly up. Eventually got bout by the local community energy trust in the name of 'economic development', which means lets waste buckets of money on something that isn't viable. Idiots playing business with other peoples money.

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Ah state subsidies for otherwise unprofitable business models. Goes well with the xenophobia and homophobia demonstrated by Labour recently and proof that they are going back to their roots. Well done.

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The labour party doing what it always does before a general election.. promising the world. But anyone with a memory will know that after they get into power, statements like oh we costed that, and decided it was going to be too expensive, start rolling off their tongues.

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Prime Sawmill is an appearance grade mill. It is designed to target clear woods from the pruned butt log of a tree. The next unpruned part of the tree is a structural log which gives building timber. It will be hard for a pruned log mill to cut a structural log efficiently (read profitably).

Prefabrication is possibly an option if it can be designed to fit in a container and exit the region by rail. If it can fit in a container it can be go on a truck anyway. It would still be far more economic to freight the lumber to a fabrication plant close to the market that requires the buildings.

The biggest strategic advantage the East Coast has is its vast estate of pruned logs. Over the next 20 years or more there is far more benefit for the Coast to use the facilities it already has to mill the resource for which it has a competitive advantage. Accordingly it should use the Prime Sawmill to cut appearance lumber and possibly add capital to further process clear boards or mouldings. Everything is there to do it except the industry expertise.

Andrew Little's grandstanding on this without researching properly seriously undermines his credibility.

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The level of pruned logs available in Gisborne is not as high as some people think, a lot of foresters skipped pruning because the costs weren't matching the expected increase in prices. One of the biggest issues is also the cost of extraction, doesn't take a lot of swing in prices to for the extraction costs to wipe out any profit. Have a valuation here with 10% drop in prices giving a 30% drop in forest value.

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Hey, that's my money you're talking about. You are NOT to pledge any taxpayer money, Andrew, unless strict ROI criteria are applied in partnership with private capital. Stick to unionism where you belong.

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Good value as it is 20% less than the cost of a flag. Which expense is worth more to the future of New Zealand?

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The flag of course, its something I can be proud of, not subsidising a lumber company.

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its -> it's

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