IMPORT CONTROL URGED

Press, Volume CVIII, Issue 31836, 14 November 1968, Page 5

IMPORT CONTROL URGED

The New Zealand Textile and Garment Manufacturers’ Federation considers that a major part of present Government economic policy is slowing down production and is likely to reduce living standards.

The federation, with membei*companies employing almost 27,000 people, is concerned that New Zealand is continuing to spend much more on private imports than it did last year. It is also concerned that the value of overseas orders placed by a cross-section of firms in September was 46 per cent higher than orders placed in September last year. “This has produced further warnings from the Minister of Finance (Mr Muldoon), and we feel the public should be fully aware of the likely results of alternative economic policies,” says a statement endorsed by the federation’s annual conference at Wairakei. “Faced with balance of payments problems, New Zealand can basically choose between two immediate policies. Either the Government can save overseas funds by using selective import controls or it can reduce importing by ‘dampening down demand’ inside New Zealand.

“To carry out the latter programme means a policy of credit restrictions, high bank and interest rates, high tariffs, high prices, and at least a degree of unemployment. “This has been the policy in the last year, and it has not worked.

“During the year New Zealand production in many industries has been reduced—and you do not increase living standards by producing less. Retail spending—a true indicator of purchasing power —is down in dozens of fields, and unemployment has been a continuing problem. In the textile industry alone, total staff was reduced by 4197 between April, 1967, and April, 1968—from 36,203 to 32,006. Less Efficiency "Had all this led to increased efficiency, it may well have been accepted as a short-term necessity. But, in fact, the reverse is true. The Government Statistician estimates that productivity, or output per worker—one of the main indicators of national efficiency—is also down. Private imports in the three months to September 30 are $3l million ahead of the same period last year, and the Minister of Finance has indicated that further measures may be taken to achieve goals that have eluded us.

“In a country where imports represent about 20 per I cent of the total value of I most industries’ output, an I

overseas funds gap of, say. >2O million can be reduced either by a direct import cut of $2O million—preferably selected where it will cause ‘he least disruption—or by reducing internal; demand by $lOO million. “If that latter policy is to be continued, then at least the public must be continually made aware of what it means—a reduction of $lOO million in spending power for every $2O million saved in imports. “But at a time when even the richest nation on earth, the United States, is reimposing direct import quotas, we feel it does not make economic sense for a small country such as New Zealand to rush into dismantling one of the economic weapons which has previously helped to give our people such an enviable standard of living. “We do not, however, see import control as ihe sole long-term answer to New Zealand's economic problems. Rather, we support the view that for New Zealand's developing economy optimum use of resources is most likely to be achieved by a combination of selective import control, adequate tariffs and appropriate fiscal and monetary policies. Basic Industries “Over all, it is vitally necessary that New Zealand should develop a hard core of basic industries that are truly competitive internationally—in the same way that the farming and paper industries are competitive.

“This may entail Government action to stimulate heavy investment and changes in many basic industries—from wool and food processing to fishing, from steel to aluminium—and this federation will support what incentives may be necessary to do this.

“In our own textile and clothing field, any Government incentive to encourage economies and efficiencies in the wool-processing industry would be particularly welcome.

“In many product categories particularly where dumping is likely to become an international problem, as it has become with clothing in Australia—we believe selective import control must continue to be maintained as a major tool for national development.”