Primary Goods To Pay For Imports

Press, Volume CIII, Issue 30482, 2 July 1964, Page 19

Primary Goods To Pay For Imports

Primary produce should continue to be New Zealand’s major export, says Mr G. Jackson, a former president of the Bureau of Importers and the Auckland Chamber of Commerce.

Mr Jackson was commenting in support of views expressed in a recent leading article in Press.” “For 30 years this country has been ignoring primary production and following the economic policy of Dr. W. B. Sutch to make New Zealand a ‘Little Switzerland of the South’,” Mr Jackson said. “A more inept analogy could hardly be conceived. On the one hand, Switzerland is in the centre of a large land mass with ready access to all possible types of raw materials, and with large contiguous markets to which she can export her manufactured products. On the other hand, New Zealand is in the centre of the Pacific Ocean. Her nearest market, Australia, is well endowed with raw materials whereas New Zealand has a paucity of these. Export Problems “Because of their large production potential, Australia can produce goods at a cheaper cost than New Zealand. So there is very little we can export to that country in the way of manufactured goods. Our next nearest neighbours are the countries of Asia, but their standard of living does not permit buying of manufacturers from New Zealand produced under our high labour costs. “Yet successive Governments have followed the policy of Dr. Sutch for the last 30 years. Both political parties have followed a policy of full employment, believing this could be achieved only by the development of secondary industries.

“Notwithstanding that tertiary industries employ more persons than primary and secondary together (not only in New Zealand but in all other developed countries) successive Governments in New Zealand have followed the policy of Dr. Sutch.

Tariff Protection “Professor Colin Clarke, of Oxford, said that the barometer of a country’s economic strength is the number employed in its tertiary services. As you rightly pointed out, there would be no difficulty in maintaining full employment it tariff protection to secondary industries were reduced to 10 per cent. A large proportion of secondary industries in this country are merely service industries as, in fact, are the newspapers, printing houses, garages and other workshops. For example, New Zealanders would not be satisfied if their morning paper had to be flown across from Sydney or Melbourne and delivered in the late afternoon. Similarly, when a motor car breaks down, we don’t want to have to send it to Australia for repair. So garages and service industries would still exist if all protection were removed.

“I was very pleased to see that in the Budget the Government at long last has recognised the need for increased incentives for primary production—the only goods which this country can. export. We can therefore now look forward with hope to our chronic balance of payments position (as Dr. Sutch described it in Napier some two or three years ago) being remedied. “The only disappointment was that the Budget gave no relief whatever to harassed importers of manufactured consumer goods. Fifteen years ago, these represented 35 per cent of New Zealand’s imports. Last year, on a statement made by the Minister of Customs, our imports of manufactured consumer goods (other than tea, coffee and motor cars) represented 4.88 per cent of our total imports, or a total of £l2 million. Reduced Licences “Since then, import licences for manufactured consumer goods have been reduced by 22J per cent, not 10 per cent as stated by the Minister; so for the next import licencing year, our total imports will represent only four [fer cent of £lO million. “We importers are being starved to death under Dr. Sutch’s policy of making New Zealand a ‘Little Switzerland of the South.’ Many wholesale hardware importers have been driven out of business and mny more will follow unless they are given some relief,” Mr Jackson said.