PROTECTION OF INDUSTRY Intensive Study By Conference

Press, Volume CIX, Issue 31981, 7 May 1969, Page 1

PROTECTION OF INDUSTRY Intensive Study By Conference

(New Zealand Pres, Association)

WELLINGTON, May 6.

Some consensus of opinion on one of the most contentious issues in the New Zealand economy—the question of protection of industry—may emerge from the National Development Conference.

After a surprisingly restrained debate this afternoon, the differing yet perceptibly converging attitudes of various sectors—including those of manufacturers, retailers, farmers and labour —agreed in a committee of the conference to set up a small drafting committee in an attempt to reach some form of agreement.

Exercising a tight rein on proceedings, the chairman of the committee, the Minister of Industries and Commerce (Mr Marshall) suggested the move after receiving a number of amendments to six resolutions on the protection issue before the conference. The drafting committee will comprise Dr H. C. Holland, manufacturers, Mr D. B. McDonald, Federation of Labour, Mr A. C. Begg, Federated Farmers, and Mr J. N. Laurenson, retailers. The chairman will be Mr H. G. Lang, Secretary of the Treasury. The resolutions dealt with a number of aspects of protection ’ but the debate appeared to settle mainly on one which urged the Govern: ment to proceed “with all practicable haste" to implement its announced policy of dismantling the import licensing system and replacing it with a policy of appropriate tariffs. ‘Too Little' Professor B. P. Philpott, of Christchurch, welcoming the resolutions, said he nevertheless felt too little had been said in the manufacturing committee’s report about the need for the level of protection to be as low as possible. He pointed out that the implications of the targets set by the conference called for a restructuring of the economy and the development of efficient export industries.

Unnecessary “nurturing” of industries was not consistent with restructuring.

! “If we are to retain im- , port controls then let us ensure they do not hamper the \ development of efficient industry,” he said. Growth Rate “We won’t get a 4j per ■ cent over-all growth rate without restructuring and this restructuring cannot be achieved without some pain and some tears,” said Professor Philpott Mr Laurenson, of Wellingi ton, said he thought it would ■ be “a great pity” if the con- . ference adjourned without ■ giving strong evidence of its , opinion on the shift away ' from import licensing to some ■ other form of protection. Speed Of Change i Mr Marshall said he felt ■ that delegates should not lose ■ sight of the fact that the i issue was the speed at which : the change to tariffs should I be implemented—not between ■ import licensing and tariffs. Mr L. H. Stevens, of Auck- : land, said “respectfully” he ■ thought the purpose of the ' discussion was to consider the respective places of import licensing and tariffs. Speaking on behalf of »manufacturers, he moved an . amendment to the resolutions ’ that “there be a continuing i relaxation of import licens- , ing and a move towards tariff I protection carried out in ac- ; cordance with general conditions as laid out in the ’ manufacturing committee’s jreport” ! Options Open t He said manufacturers ■ wanted a “flexible policy of t protection” in which no one 1 method was excluded. The I intelligent use of import lie-

ensing had been a more effective instrument in holding costs than tariffs. Mr Stevens said he believed there would have to be a continuation of import licensing in some form. “We must keep our options open and use the form of protection best suited to our situation,” he said. The retiring Government Statistician, Mr J. V. T. Baker, said protection served a‘ number of functions, including the protection of local industries and the development of selected industries. A form of protection was needed, flexible enough to be part of the country’s balance-of-payments policy. Cost Structures Mr F. L. Onion, the chairman of the Dairy Board, said he was concerned about the effect of high protection on cost structures. Mr H. T. Nolan, of Auckland, said that if import controls were removed and industry did not have protection, unemployment would follow. Mr W. J. Knox, of Auckland, and secretary of the Federation of Labour, said the protection question was “a very vital issue” as far as the F.O.L. was concerned. The federation’s main object was to retain full employment. In Britain, thousands of workers were unemployed because of the “flooding of markets” and the lifting of control. Not Conceded Mr Begg, of Ashburton, said the question was not whether manufacturers needed a level of protection, but what form protection should take. He conceded the need for a level of protection, but did not concede that all manufacturing needed protection. “We believe it should take the form of tariff protection; and that the time it takes to implement it should not be too protracted.” Protection had a cost-rais-ing effect on other sectors of the economy.