Matthew Hooton: Caution dooms billion-tree plan

COMMENT: Shane Jones' One Billion Trees programme has joined Phil Twyford's KiwiBuild as a major embarrassment for the Coalition.

For both, ministers chose direct action to deliver their objectives rather than regulatory alternatives.

For the 100,000 new homes, the Coalition could have abolished the Auckland metropolitan limit, removed height restrictions for apartment blocks around transport nodes, reformed Resource Management Act processes and the building code, allowed foreign construction companies to bring in temporary workers based on their employment law and wage rates rather than ours, and properly invested in basic infrastructure, including ultra-fast rail between Auckland, Whāngārei, Hamilton and Tauranga.

For the billion trees, the Coalition could have properly implemented the emissions trading scheme (ETS), making farmers pay 100 per cent of the cost of their methane and nitrous oxide emissions, thereby radically shifting land-use economics from pastoral farming to forestry.

For obvious political reasons, the Coalition took neither of these regulatory paths.

The direct-action approach should have been both popular and successful for each programme.

They have been neither because Jones and Twyford have been unable or unwilling to accept the magnitude of what is involved.

Worse, as discussed here in the KiwiBuild context two weeks ago, they have put their trust in a Wellington bureaucracy that has failed to promote tree planting or house building over the past 20 years despite those being the objectives of successive governments.

The reasons are mainly cultural.

The Wellington bureaucracy has been trained, first by Helen Clark and Heather Simpson, and then by John Key and Steven Joyce, that government projects should generally proceed cautiously and incrementally.

Today's mandarins are no longer able to comprehend projects of the scale of Sir Robert Muldoon's Think Big, which both the trees project and KiwiBuild rival, or even regulatory reform of the enormity of that in the mid-1980s and early 1990s.

Anything beyond a subsidy here or a joint venture there is beyond the imagination of today's officials. The same problem prevents any real plan to ready Auckland's disastrous transport network for a population above 2 million, expected in just 15 years.

To be fair to Jones, he at least recognised the problem early when, in April, he sought to appoint his own "shitkickers" to deliver his projects, but nothing came of it.

A workable plan to plant a billion trees has been known by National and the bureaucracy for nearly for a decade.

NZ First and the Greens' commitment to plant 1 billion trees was also partly informed by the work led by Graeme Hart's Rank Group in 2009 and subsequently made available to them through the various industry associations involved.

The first step is to accept that individual farmers and farm-foresters are unlikely to be persuaded to take on any costs or risk after decades of forestry policy changes and perceived poor treatment of the industry by successive governments.

But many farms have at least some land where returns are low, and this adds up.

Back in 2009, it was estimated that over 2 million hectares of high-country beef and sheep farmland was delivering its owners annual pre-tax returns below $100/ha.

The best strategy is not to try subsidising farmers to plant this land, leaving them to hire workers and pay for insurance themselves.

Instead, the state should lease the small pockets of land for, say, $150/ha a year, and plant it in trees with a workforce it trains and employs itself. The government would own the trees.

Big government-owned nurseries would probably also need to be established to deliver 100 million seedlings each year, including exotic and native species.

With its economies of scale and without the need to insure small pockets of forestry spread throughout the country, the state could deliver the project in a way that subsidising individual land owners clearly can't.

The Department of Conservation also has significant land with low conservation values suitable for planting native trees.

If this all sounds a bit Soviet, so be it. That is the very nature of a project to plant a billion trees over a decade without being prepared to use the ETS or any other mechanism to change the underlying economics.

Jones was initially attracted to a bold approach for the One Billion Trees just as David Shearer originally envisaged KiwiBuild as a massive state undertaking.

Both projects are fiascos because ministers have been convinced by the bureaucracy that such ambitious goals can be delivered with the same caution demanded by the Clark and Key-English regimes.

Unless there is major cultural change in Wellington, the next Government will fail too.

- Matthew Hooton is managing director of PR and corporate affairs firm Exceltium, which has worked extensively for the forestry industry over the last 15 years and on the Rank Group project referred to above.