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FGT 5397 Investing circleABOUT THE LEVY

If you own a plantation forest, small or large, you pay a levy on the volume of wood material sold.

The Forest Growers Levy Trust (FGLT) is the custodian of this levy money, ensuring it is appropriately spent in areas such as research, development, biosecurity and promotion, to the benefit of the entire forest sector, ensuring growers are well supported and the interests of the sector can be advanced.

The current levy rate is 33 cents per tonne of wood sold – raising approximately $10 million in levy money each year. The actual levy income depends on harvest levels.

> Read more about the Harvest Wood Material Commodity Levy

 

THE 2024 LEVY REFERENDUM PROCESS

> Click here to download the 2024 Forest Growers Levy Vote information book

FGT 5397 Stats quadrant v02The Commodities Levy Act 1990 requires the Forest Growers Levy Trust (FGLT) to conduct a levy referendum every six years.

The last levy referendum in 2019 culminated in forest owners voting to increase the maximum levy rate from 30 cents per tonne to 33 cents.

The Commodity Levies (Harvested Wood Material) Order 2019 will expire in November 2025, and is therefore up for renewal. Renewal of the Levy is subject to consultation with levy payers and approval by the Minister of Forestry.

The FGLT will be consulting on the next Levy Order throughout 2024.

During this referendum year, a high-level work plan and budget will be prepared by the FGLT, including a recommended levy rate for 2025 and a maximum rate for the six-year duration of the next levy order. The proposed spend and levy rate will look to deliver forest growers the best return on investment.

The FGLT will present this information to growers through a series of roadshows, webinars, online and mailed-out information and through industry publications; seeking feedback on how growers wish to see the levy invested in the years to come.

Following consultation, eligible forest growers will be able vote from 1 October to 31 October 2024, indicating whether they want the levy to be renewed for another six years and at what rate.

A majority vote (from both the number of voters and their production forest size) must be met for the levy to be passed into effect.

> 2024 Levy Referendum Timeline

 

PROPOSED RATE

FGT 5397 Potential levy earnings v02The levy investment for the 2024 work programme is budgeted at $9.5 million.

The FGLT propose to increase the levy rate from 33 cents to a band of 40 to 70 cents per tonne of wood sold for the next Levy Order period (18 November 2025 to 17 November 2031).

Delivering a stronger return on investment for forestry was a key consideration when FGLT scoped the most appropriate levy rates.

The proposed levy rate band was formed from feedback from a survey of small- and large-scale growers in February 2024.

FGT 5397 harvest tonnage v02

The survey found:

  • Nearly half (49%) of respondents said the sector needs more investment
  • Less than a third (27%) of respondents said the sector should maintain the same level of investment
  • Only 4% of respondents said the sector should be investing less.
  • Respondents rated research and development as the highest priority area for investing into followed by biosecurity, services for small scale foresters and sector promotion.

A levy rate of 40 cents was identified by the FLGT Board as the minimum rate required to affect sufficient change and investment and deliver the benefits growers are seeking.

An intermediate levy rate of 60 cents would produce a total levy take of $18 million a year – placing forestry in lock stead with the levy take of New Zealand’s three other key primary industries.

FGT 5397 Potential levy earnings v02This would provide forestry with an additional $8 million in levy money received each year to spend on industry-good projects and activities, with a proposal to invest the additional revenue in the following priority areas:

  • Promotion and advocacy
  • Mechanisation and robotics – from nursery to transport
  • Adding value
  • Tree and soil biology
  • Alternative species and uses
  • Biosecurity and fire protection
  • Pinus radiata development, uses and market access
  • Environmental management and impact.

The spend in each category is a broad proposal to provide flexibility and to cover changing circumstances and sector priorities. For example, some programmes within these priority areas may be extended beyond a single year, some may be of short duration and others may arise at short notice.

 

ROADSHOWS AND WEBINARS

The FGLT held 20 in-person regional roadshows from April through to June. The roadshows were an opportunity for growers to provide feedback on the proposed levy rate before the levy referendum takes place in October 2024. 

> View the full levy timeline

 

Consultation with growers is continuing through a series of webinars (full schedule below).

The webinars are an opportunity for the sector to guide the levy investment, for growers to provide feedback and to highlight areas of investment that are most important to them.

Feedback will be documented by FGLT as part of its consultation process.

Webinars are free to attend and will run every Wednesday in July for approximately two hours. No RSVP is required.

Participation is encouraged to make sure your views are heard.

 

ELIGIBILITY TO VOTE

To be eligible to vote in the 2024 Forest Growers Levy Referendum, you must own a qualifying forest which:

  • Is a contiguous and relatively homogenous stand or stands of trees that are 10 years or older with a common set of characteristics, normally managed as a single unit.
    * This applies to all species, wildings, and regeneration of trees grown for eventual harvest but excludes Christmas trees and trees grown for domestic firewood.
  • Total at least four hectares at the time of voting.
     * For the purposes of the 2024 election, this means your stand(s) must have been planted before 30 September 2014.
  • You intend to harvest between 18 November 2025 and 17 November 2031

It is assumed that the earliest a tree may be harvested is at age 16 via production thinning.

This forest-age restriction is designed to ensure that everyone who is growing trees which might be harvested and sold in the 6-year levy period (18 November 2025 to 17 November 2031), and therefore pay a levy, has the right to vote.

 

Who is not eligible to vote?

If you are a forest owner, and you do not intend to harvest trees between 18 November 2025 and 17 November 2031, then you are not eligible to vote in the referendum.

If you own a forest with a stand or stands that total less than 4 hectares in area, you are also not eligible to vote regardless of the age of that stand(s).

 

 

HOW TO VOTE

Eligible voters will have four weeks (1 – 31 October 2024) to cast their vote. During voting, growers will be asked whether they would like the levy renewed for another six years (2025 – 2031) and at what rate.

The referendum itself will be conducted through independent company, Research NZ. The Ministry for Primary Industries (MPI) is responsible for ensuring the levy vote has been conducted in accordance with the law.

Eligible growers can cast their vote online through forestvoice.org.nz from 1 October 2024.

 

FAIR PROCESS

The number of votes made in favour of the levy, and the size of those voters’ forests, ensures that the voting process is fair to all.

More than half the votes must be cast in favour of the levy in order for it to continue, and the “yes” votes must represent more than half the total hectares of the forests.

This means the vote can’t be swayed by a few large forest growers or by a large number of small forest growers who have very few trees overall.
The process ensures the vote is a sound representation of the majority of growers, and therefore the majority of the forest growing sector.

 

HOW GROWERS WILL BE NOTIFIED

The Forest Growers Levy Trust will publicise the result of the 2024 levy referendum as soon as the result is audited and confirmed by MPI and the Minister of Forestry. The result will be announced in 2025.

Growers can expect levy referendum information, resources and results to be made available through:

  • The FGLT website
  • Tree Grower magazine
  • Monthly webinars
  • Direct emails to growers
  • Mailouts
  • Roadshow dates and information advertised in regional newspapers
  • Information in the Forest Owners Association’s monthly e-Newsletter
  • The quarterly Bulletin publication

 

CONTACT US

For more information about the levy, roadshows or voting process, please contact: This email address is being protected from spambots. You need JavaScript enabled to view it.

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