New Zealand’s forest owners are paying more and more to comply with the country’s forestry rules, with a new report from the New Zealand Institute of Economic Research revealing that the cost of a resource consent in Tairāwhiti now ranges between NZ$19,000 and $35,000. That is according to Forestry: Cost of compliance, one of three reports prepared for the country’s forest growers and released by the New Zealand Forest Owners Association on Wednesday, which finds the costs “material, unevenly distributed” and falling hardest on small growers.
“A small grower can pay almost as much to prepare a resource consent as an operator with a forest 100 times the size,” Dr Elizabeth Heeg said, with the NZFOA chief executive comparing a 20-hectare block with one of 2,000. Some small blocks “incurred almost the same compliance effort as 90,000-hectare estates”, Chris Nixon writes, and the economist found costs that scale poorly for anyone without an in-house planning team.
Tairāwhiti, the Gisborne region on the east coast of the North Island, is the “most expensive, most time-consuming, and most unpredictable region for forestry consents”, Nixon found. It is the only region where companies waited up to a year for a simple consent, and one culvert took 12 months to consent, with six more before the invoice arrived.
Gisborne District Council requires a suitably qualified professional to certify both planned and completed works, “with no comparable requirement elsewhere”, and its discharge permit for sediment and slash under section 15 of the Resource Management Act is unique to the region. A forest that straddles the Hawke’s Bay boundary, where a consent costs $5,000 to $7,000, can pay thousands more on the Tairāwhiti side for identical terrain and risk, and consent charges in the district have doubled since the ministerial inquiry that followed Cyclone Gabrielle.
A simple consent for an afforestation setback or minor earthworks costs $2,800 to $3,500 to process. One for slash management, sediment discharge, or a high-risk erosion zone runs to $15,000 in council charges alone and another $25,000 in internal or consultant time, and the larger forests take out 161 consents a year.
Monitoring bills run almost double and treble their pre-2018 level
Monitoring after a consent is granted runs at 20 to 50 per cent of the fee in some regions, and one forest manager was charged 80 hours of council time for a two-hour site visit on a minor road. Across the sector, it comes to $372,000 to $744,000 a year, up from $140,000 before the standards, based on order-of-magnitude estimates from 13 entities.
Small companies’ plan advocacy has risen from $50,000 a year before the standards to $300,000, while large companies spend $988,000, lower than most big players paid before the standards came in. One grower reported around 600 hours a year on submissions and plan changes, time Nixon values at $125 an hour.
Council staff unfamiliar with the standards issued an abatement notice for a permitted ford crossing and wrongly challenged riparian planting, and one grower was forced to source metal offsite at a cost of $10,000 to avoid further enforcement risk. Small growers “must often advocate defensively”, Nixon writes, “explaining regulations back to councils because they lack the institutional presence of large companies”.
Producing NES-compliant mapping files added $1,000 a hectare to replanting one 20-hectare block, and growers are also paying science levies of $2,000 to $3,000 and rates set at up to four times those on competing land uses. Ruapehu District Council has phased in a 400 per cent increase on forestry land over four years.
Forestry is $5.4 billion of New Zealand’s GDP in the year to March 2024 with processing included, 1.4 per cent of the national economy, and 7.9 per cent of Tairāwhiti’s, the highest share of any region, in the companion report on the economy. Daniel Hamill modelled a 10 per cent fall in the region’s forestry output, cutting its exports by 4.41 per cent and household spending by 1.4 per cent.
The environmental report counts harvesting costs $3.50 a tonne higher in high-risk regions since Gabrielle and 72 per cent of Tairāwhiti’s forestry terrain is the orange and red zones. Operators in parts of the region report returns “approaching or delivering negative returns”, and some harvests are already deferred “due to risk and cost concerns”.
Companies expect their advocacy costs to rise again as RMA reform and new national settings on freshwater and indigenous biodiversity come through, Nixon writes, and he wants that direction set nationally because councils are “unlikely to be in the best position to determine the national interest”. Growers “expect to meet high environmental standards”, Heeg said, but costs “have to reflect the size of the forest and the risk involved”, or they start to decide whether people keep investing and replanting.
