Labour's pledge to set up a forestry service in Rotorua has been praised by a major timber processor.

However, NZ First leader Winston Peters has accused Labour of "dishonesty" and stealing his party's long-standing policy to re-establish the NZ Forestry Service.

Labour leader Jacinda Ardern announced the policy after a tour of Red Stag Timber near Rotorua today.

She said she wanted to see wood processed and manufactured onshore - rather than being sent overseas as raw logs.

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A Labour government would give first preference for using wood in building projects, she said, such as its "KiwiBuild" programme to build 100,000 affordable homes over 10 years.

It would also require the sale of logging rights on more than 50ha to be approved by the Overseas Investment Office (OIO).

Ardern could not say how much setting up the new service would cost or how large it would be, saying Labour had been unable to get details from the Ministry for Primary Industries as to how many staff worked on forestry issues.

"It seems it is really a handful of staff working out of MPI. That suggests to us there is probably room for that to be scaled up.

"At the core of what they will be doing is coordinating our national forestry plan - making sure they are providing a service to those who are looking to use their own marginal land [for forestry], plus making sure that we are utilising Crown land to maximise possible planting. It is about making sure we have that security of supply [for domestic processors]."

Marty Verry, a director at the family-owned Red Stag, said a new service would help bridge the gap between industry and central government.

"You've got the regions and industry doing their thing and you have got the bureaucrats in Wellington thinking they know what's going on.

"But they don't have a clue. And they don't interact much with us at all. It is about embedding them in our region so they understand what we need and what we are trying to do."

Verry took Ardern on a tour of the processing site, including a cockpit-like control room that overlooked the processing floor. After Ardern sat in the control seat she was told enough wood had been processed in those few minutes for four houses.

After the tour Ardern met Labour supporters in town, including former broadcaster Tamati Coffey, who is standing in Waiariki for Labour and bidding to upset Maori Party co-leader Te Ururoa Flavell.

Several children were presented to Ardern by parents keen for photographs, although one toddler was much more concerned with the M&Ms he had just dropped on the ground.

Ardern told the rally she had spent time in the nearby forestry town of Murupara, and pledged to bring the forestry service out of Wellington and to Rotorua.

After she finished speaking Winston Peters' campaign bus rolled past, and it wasn't long before the NZ First leader had issued a press release attacking Labour for policy plagiarism.

"The desperate two old parties are obviously rifling through our speeches and documents for ideas," Peters said.

"It's only nine days since New Zealand First organised a major forestry industry roundtable in Whangarei. We've long had a policy to revitalise the forestry industry and restore the Forest Services, disbanded by the Labour government in 1987.

"That was followed by National selling most of the state forests in the 1990s."