Forest owners on offensive

About 1.2 million hectares of forest planted before 1990 could be locked up forever as forest because of the Government's planned new deforestation "land tax", according to a new lobby group.

A group of big and small forest and land owners, the Flexible Land Use Alliance, says that if the Government does not back down on including pre-1990 forests in the Emissions Trading Scheme it wants "full compensation for the loss of land value".

The alliance claims that if that land is converted to another use, such as dairy farming, owners would face a liability of $20,000 to $65,000 a hectare.

Profit from the trees could range between $10,000 and $40,000 a hectare, so it would not be worth cutting down the trees and putting the land into another use such as dairying.

Earlier fears that the liability could be $13,000 a hectare had already led to 40,000ha of trees being cut down and not replaced since 2004, to beat the introduction of the emissions trading legislation.

Group spokesman Ross Green said yesterday in Wellington that the scheme amounted to "a land tax for want of a better word".

The group wants pre-1990 forests excluded from the emissions trading scheme so they do not face that liability. That would allow land to be freely switched from forest, to dairy, or anything else, which would mean higher returns for landowners.

The Government would still face the liability from de-forestation, though the alliance said the cost to taxpayers would be "relatively" minor.

But Agriculture Minister Jim Anderton said the alliance's first preference of all pre-1990 forests being exempt from the emissions trading scheme was "a non-starter".

"This is inconsistent with the Kyoto protocol's rules, it would create a huge liability for the taxpayer with no benefit for the environment, and would destroy any credibility for New Zealand in taking a leadership position on global deforestation."

The alliance said the scheme would mean the value of the land was "seriously eroded".

If the Government destroyed value in land it should offer full compensation for the loss of value on 1.2 million hectares.

The group would give no indication of how big a claim might be.