Opposition attacks tariff policy

Press, Volume CXI, Issue 32706, 8 September 1971, Page 3

Opposition attacks tariff policy

(New Zealand Press Association)

WELLINGTON, September 7.

The Government’s declared policy of eliminating the bulk of import licensing within five years and replacing it with tariff control was attacked in Parliament today by the Opposition.

Discussing the Department of Industries and Commerce Estimates, the Opposition spokesman on trade, Mr W. W. Freer (Mount Albert), said that manufacturers were being' asked to invest large sums of money in restructuring their industries without knowing what future protection would be.

Mr Freer wanted to know i how a system of punitive i tariffs could be introduced < without forcing up prices to the consumer. This was 1

what had happened over* seas, he said. Consumer prices in many fields in Australia had risen substantially when tariff control had been introduced.

“Is the Minister looking after just the interests of the importer?” Mr Freer asked. “Because he is not looking after the interests of the manufacturer and the consumer.” The Minister of Industries and Commerce (Mr Shelton) said there was nothing inconsistent about removing import licensing while providing more money for the development of industry. The most efficient industtries were those facing competition from overseas and most New Zealand industries were efficient enough to compete.

“NOT HIGHER PRICES” Mr Shelton said that manufacturers would not wake up one morning to find that licensing had been abolished. Tariff control would not mean blanket higher prices If people chose to pay higher prices for imported goods, that would be their choice, but comparative New Zealand goods at cheaper prices would still be available, he said. “The policy we are following is one of eliminating import licensing, one of adequate protection for industry, and one which will protect the consumer by competition,” Mr Shelton said.

“In some cases, we said it will be necessary to retain import licensing.” Mr B. P. Mac Donnell (Lab., Dunedin Central) said that the abolition of import licensing within five years could result in many small industries being forced to close their doors. If it had not been for licensing, many local industries would not have been able to develon their export potential. He forecast a drop in exports when licensing was removed.

Mr J. F. Luxton (Nat., Piako) said that many economists in New Zealand had been advocating the abolition of licensing to increase productivity. and the purchasing power of the people. Mr R. L. G. Talbot (Nat., South Canterbury) said that the introduction of tariff control will be one of the great steps forward in New Zealand for building more efficient and viable industries. Sir Basil Arthur (Lab., Timaru) said that if the Government’s policy was carried out, industries in the smaller areas would be the ones most affected particularly as the Government had no regional policy. Mrs E. I. Tombleson (Nat., Gisborne) suggested caution in the development of industries in overcrowded areas. There were many centres in New Zealand who were pay-

ing for these areas to increase their manufacturing ability. Mrs Tombleson suggested that much of the nation’s raw

materials, particularly timber, were being exported without sufficient thought being given to the by-products which could be made from them. Mr Shelton said he did not

anticipate industries being forced to close down because of licensing removal. The climate for industry was very good. The Government believed in regional development and was prepared to give any assistance to get industry into the regions, Mr Shelton said. But the time had not arrived when industry should be directed away from, say, Auckland and the Hutt Valley, he said. Industries needed the assistance of smaller groups for components, and it was much more economic to have a series of industries in one

area. Mr Shelton said that where regions gave the Government compelling reasons why industry should go to their area, this information was passed on to developing industries. But industries did not normally ask where .they should go. They made their own decisions, and then applied for import licences for equipment, Mr Shelton said.

Mr F. M. Colman (Lab., Petone) said that any move to tariffs would inevitably raise the cost to manufacturers and then to the consumers, and would lead to increased costs for exports. The terms of trade at present had never been worse in the past 10 years. It was not realistic to suggest removal of import control at this stage. “INDUSTRIAL HARMONY” The Minister of Customs (Mr Adams-Schneider) said industry had never developed more than under the policy of the present Government. The Government’s policy had been flexible. Mr W. L. Young (Nat., Miramar) said manufacturers were greatly assisted with most of their raw materials free from import control. This had been a great boost to manufacturing, he said, and was a result of progressive Government policy. Dr A. M. Finlay (Lab., Henderson) said that if there was to be industrial development- there had to be industrial harmony. The Estimates set aside more than a million dollars for industrial development, he said, but unless industrial mediators were appointed as recommended, this sum would not be enough. Mr E. S. F. Holland (Nat., Riccarton) said that some industries ’ had needed protection to allow them to get established but New Zealand had reached the point

where this was no longer needed.

Many strong industries had been helped to their feet, perhaps within the framework of import licensing, but not beepuse of it, he said. But once they were established, they had not needed this to move into the export field. They had done this through their competitive positions. But Mr R. J. Tizard (Lab., Pakuranga) said Mr Holland was looking only at one side of the argument. He was ignoring the fact that most of the successful industries he described could not have got into a position in which they could export without having had protection earlier in their development.

“PRICES DROPPED” The Deputy Leader of the Opposition (Mr Watt) said the New Zealand Steel Company could never have been established had it not been for import licensing. The “initial protection” of the industry would have to continue for years. Mr Shelton said the industry was being developed under a 10-year period of protection. It had not been past experience that replacing import control with tariff protection led to higher costs. It generally made the industry more competitive. In many cases, prices dropped. Mr B. G. Barclay (Lab., Christchurch Central) said the Minister was doing nothing about encouraging growth in the smaller centres of the country. Mr W. G. Tolhurst (Nat., Wanganui) said he believed it was up to the Government to some extent “to regionally develop itself.” “The Government could well look at decentralising some of its own departments, which would give a lead to other industries,” he said. Mr T. M. McGuigan (Lab., Lyttelton) said that special taxation incentives were needed to encourage industry to those areas where industry was needed.

There should also be differential freight rates for such areas, he said.