Labour said it’s worried about jobs which will disappear but is complaining the increase in the minimum wage isn’t high enough.
The minimum wage is just that, the minimum. It’s a floor not a ceiling.
Any business which can afford to pay its workers more than that can and many will.
But not all work is worth more than that and imposing higher costs on businesses without lowering other costs or increasing returns will put other jobs and whole businesses at risk.
It will also increase the move to replacing people with machines which is supposedly one of Labour’s big worries.
In another example of Labour’s lamentable lack of understanding of business principles, the party wants to force forests to sell logs to local mills.
Forest owners say they are keen to sell their logs to local mills, so long as the terms of sale match those from export markets.
Forest Owners Association chief executive David Rhodes says there have been cases where local mills have been unwilling to do this.
“It’s not just about price. It’s also about the payment risk, the length of the contract and the quality of the logs on offer. Many modern mills have tight specifications for log supply. Logs that don’t meet those specifications are usually exported. This will always be the case,” he says.
Responding to a call from Labour Party MP Stuart Nash that “foreign forest owners” should be forced to sell logs to local mills, Mr Rhodes says owners of forests – foreign, corporate, private companies, iwi, partnerships or individuals — look for terms and conditions that give them the best overall returns.
“In many cases they get only one chance to do this, having spent 27 years growing their trees. This is crucial – forestry is not a one-way bet. Just ask those forest owners, particularly in Northland, who are not replanting after harvest, because log prices are not high enough to justify re-investment.”
Mr Rhodes says it is unfair to single out overseas owners of large plantations as the reason for mill failures.
“It may appeal to the emotions, but does not advance public understanding one iota. Overseas owned forestry companies are among the leaders of the industry. They make significant investments in jobs, worker safety and the environment.”
He says forest owners understand the importance of New Zealand having a viable wood processing industry and are partners in the Wood Council which is committed to having more value added to logs in NZ.
“We are talk regularly with politicians from the various political parties about policies that will assist the forest and wood processing industries remain vibrant, viable industries providing employment in the regions. Mr Nash’s proposed policy is not one of them.”
Forestry is a risky business with a long time between planting and payment.
Forest owners aren’t charities. They’re businesses and need good returns to if they’re going to continue in business and employing their own staff.