13 Jul 2010

Budget documents show that the Government will downscale the Afforestation Grant Scheme by $2m per year over the next three years before eventually ceasing it, says Labour Forestry spokesperson Stuart Nash.

This has been confirmed by forestry minister David Carter, who says deforestation is no longer a problem and that the ETS contained sufficient incentive for people to plant more trees.

"(The scheme) is now superfluous and therefore we are moving to wind it down, I think we can spend taxpayer money more efficiently," he told NZPA.

"We are actually seeing net afforestation occurring for the first time in five or six years.  We are already seeing interest from land owners with land suitable for forestry planting and forestry consultants tell me they are very busy talking to potential rural landowners about the possibility of planting more trees."

The Afforestation Grants Scheme (AGS) is a contestable fund designed to encourage the planting of new forests. It has been part of the government’s package of climate change initiatives and like the Emissions Trading Scheme,  was designed to encourage greater levels of greenhouse gas absorption by increasing the area of Kyoto-compliant new forest in New Zealand.

Half the funding for the AGS is allocated to regional councils pool to help them meet their sustainable land management objectives. The other half is available to the general public via a public tender pool administered by MAF.

The majority of the public funding pool is allocated to species with high carbon sequestration rates. These include the usual exotic plantation species such as radiata pine and Douglas-fir. The remaining 30 percent of the public pool is reserved for indigenous and other species with lower carbon sequestration rates.

Mr Nash said that the axing of the scheme is foolish for three reasons.

"The first is that the planting of trees is vital to New Zealand meeting its Kyoto commitments. Trees eat carbon, as opposed to, for example, livestock that produce it. The only reason New Zealand doesn't have any international carbon liabilities is because of the amount of forests planted after 1990.

"Forestry will play a significant role in ensuring that New Zealand plays its part in mitigating the effects of global warming, and to cut a scheme that encourages people to plant forests defies logic.

"The second reason is that forestry has the potential to be a large employer at a time when unemployment figures are still high due to the difficult economic times. Why would the Government take the chainsaw to a scheme that has the potential to create jobs at a time of economic hardship?"

The third reason axing such a scheme was foolish was because it has a high component of regional focus and initiative.

"Half the funding is available to regional councils to help them meet their sustainable land management objectives. For example, the Hawke's Bay Regional Council has proactively marketed the Afforestation Grant Scheme as an opportunity for Hawke's landowners to establish new forests," said Stuart Nash.

"The scheme encourages regional economic development and promotes an activity in forestry where everyone wins: the landowner, the region and the country."

According to MAF the latest tender round for the Afforestation Grant Scheme funding closed on 30 April 2010 for afforestation projects between July 2011 and June 2012.

Due to the considerable interest in this and previous rounds, the ministry says there will be no tender round in October 2010. The next tender round will be in April 2011 for establishment between July 2012 and June 2013.

Sources: NZ Labour Party media release, MAF website and NZ Herald