Plan To Develop N.Z. As A Shipping Nation

Press, Volume XCIX, Issue 29232, 16 June 1960, Page 12

Plan To Develop N.Z. As A Shipping Nation

The development of New Zealand as a shipping nation in its own right is envisaged by Mr E. A. Gibson, a former Director of Civil Aviation, in a paper studying external transport services now before the 1960 industrial Development Conference in Wellington.

An Overseas Shipping Commission operating a subsidised freighter fleet to carry the Dominion's produce to markets abroad is the principal radical proposal made by Mr Gibson with the object of overcoming “New Zealand’s poor showing in external sea transport having regard to her world position as a trading nation.” Mr Gibson says that on the total combined value of New Zealand exports and imports, amounting to £540 million, freights assessed at £20.4 million had to be pai«i by New Zealanders. Of this sum it appeared that the net outgoings paid to foreign (i.e., non-New Zealand) registered carriers for the transport of overseas commerce averaged, in recent years, about £17.25 million a year. "All of this £20.4 million was payment for services rendered by the ships and work force of other countries, and to that extent represents a potential for the employment of New Zealanders and ships on the New Zealand register,” he says. “Theoretically, and from' the narrow and nationally selfish angle, this pay-out represents money that could be used, if circumstances permit, for the employment of New Zealanders in building, servicing and running ships.’ ’

Norway An Example He cites Norway as an example of a country with a population little greater than New Zealand —a country whose shipping services are a major source of national income and foreign exchange. On January 1 there were 2798 ships over 100 tons totalling 10.78 million tons gross on the Norwegian register. The net currency contribution by the Norwegian Merchant Navy to Norway’s foreign exchange earnings was £147.5 million. Possible sea transport objectives by New Zealand would be to ensure New Zealand conducts “a significant element of her overseas trade with her main markets in New Zealand-regis-tered ships so that New Zealand will have such ships at her disposal in emergency,” Mr Gibson says. ■ : -

Another objective would be to ensure that “no foreign or overseas cartel or monopoly is able to dictate the terms under .which New Zealand’s overseas commerce may be conducted.” Other objectives named are:— To ensure that the maximum reasonable exchange earnings are obtained from the operation of New Zealand ships on overseas trade routes. To ensure that reasonable employment opportunities are available for New Zealanders seeking a seafaring life by ensuring that such opportunities are available in New Zealand ships.

To ensure, by the encouragement of the registration of ships in New Zealand in the future, that the maximum stimulus is afforded to ship construction, repair and servicing in the Dominion. To ensure that the maximum support from New Zealand’s merchant service resources, including manpower, is at all times available for the New Zealand Navy. Reasonable Objectives Such objectives are “reasonable and not impossible of attainment,” in Mr Gibson’s view. He says that with air transport for the achievement of such objectives and all that is required is the essential directive from the Government to its appropriate agencies.

With sea transport, as the Government itself is not a ship operator of any consequence, there is need for some new agency to give effect to any directive. Mr Gibson envisages a standing Overseas Shipping Commission, established by Act of Parliament, “whose job it will be to investigate on a continuing basis all aspects of the overseas carriage of New Zealand trade and recommend to ■ the Government effective lines of policy in such shipping matters, and any legislation required to make the recommendations effective.” The commission would be representative of all sections of the community that have a stake in the development of New Zealand shipping, and would be the link between the Government and the operator or operators. Mr Gibson says that the “chosen instrument” device would be adopted instead of Government ownership and operation. or the subsidising of some existing operator. The commission would invite offers from any existing operator of shipping “to place on the New Zealand register such ships as it may be decided it is desirable for New Zealand to have at her disposal, in emergency these ships to be operated under a Royal Warrant, first for a probationary period of five years, and subsequently, if found to be satisfactory, for a period of 25 years with further indefinite extensions of time at the discretion of the commission, subject to the following exclusive privileges and obligations’’—

Privileges and Obligations

Royal Warrant ships would have to be owned by a New Zealand-registered company with a resident board of directors.

Ships and the operating company would be “completely free from all New Zealand taxation, except for port and coastal dues and taxation of the earnings of employees’ or shareholders’ personal incomes.” The company would be required to have a progressive replacement programme, and “will have any loan required for new ships, which has received prior approval of the Government, guaranteed by the Government.” Should any restrictive practices or attempts be made by rival concerns to artificially divert cargoes from ships of the “chosen instrument” the New Zealand Government “would take such action as would be within its power to nullify the action of the rival concern.” The “chosen instrument” would be required to register such ships as may be desired by the Government as reserve units of

the New Zealand Navy, to be taken over by the Navy if required at any time. The “chosen instrument” would be required to work toward the objective of having all New Zealand ships manned exclusively by New Zealand citizens, to give preference to the employment of naval reservists, and to provide such career opportunities for New Zealand civilian boys as may be decided by the commission.

The “chosen instrument” would also be required, on being indemnified against loss, to operate any particular overseas shipping service the Government might consider desirable. “Lest the proposed remission of taxation be considered an obstacle, let it be remembered that New Zealand collects no taxation beyond that which it « still proposed to collect. None of the taxation which it is proposed to remit is collectable now from foreign ships of companies trading to New Zealand.

“Lest the suggestions generally be thought too realistic, let it be remembered that there is a steady drain of British shipping being transferred to ‘flags of convenience’ where no proper standards obtain,” Mr Gibson says. Another View In another paper, the secretary of Industries and Commerce (Dr. W. B. Sutch) points out that the refrigerated shipping fleet which carries exports abroad is owned outside New Zealand “and therefore the use of refrigeration carries with it the automatic loss of a percentage of foreign exchange on every ton of meat, dairy produce and fruit sent abroad.

“This, of course, applies to a high proportion of New Zealand's exports, whether refrigerated or not. The payments that New Zealand makes abroad for freight on both imports and exports are significant because they are such a high percentage of total external trade and of national income,” he says. Dr. Sutch puts the proportion in this category at about 11 per cent, of exports, over 12 per cent of imports and. combined, over 5 per cent of the gross national product.

“This fact contributes to the instability of the New Zealand economy,” he says.