CALL FOR COMPETITION Import controls attacked

Press, Volume CXII, Issue 32966, 12 July 1972, Page 2

CALL FOR COMPETITION Import controls attacked

(New Zealand Press Association) WELLINGTON, July 11. Agriculture and industry were interdependent, but, until manufacturing became competitive both at home and abroad, it would continue to impose a burden on farming, said the Dominion president of Federated Farmers (Mr A. G. Begg) today.

In his report to the federation’s annual conference, he said: “Manufacturing is essential to New Zealand ... but we certainly do not expect every manufacturer to be cosseted and protected regardless of his cost of production.”

In recent years, thousands of farmers had been forced out of farming by external pressures and those remaining were further increasing their efficiency. The cold wind of international competition had to be allowed to play on the manufacturing economy to harden the industrial muscle of the efficient and to wither the unfit, said Mr Begg. At the last National Development Conference in March, New Zealand had seen a display by a group of protected manufacturers who had expressed fears as to their survival if import controls were removed, Mr Begg said. By a narrow margin they had succeeded in asking the Government to have a look at import controls. "For a long time they have been telling us of their efficiency. “It is true they said that a precondition of their ability to compete was access to the best and cheapest materials and machinery. This they have been granted, yet many of the manufacturers have now developed cold feet,”! said Mr Begg. “It so happened that when: this group of manufacturers’ was telling its tale of woe there was a slight increase 1

in the number of registered unemployed. "They used this to attempt to create panic and to gull the people of New Zealand into believing that the removal of import licensing and the increase in unemployment were directly connected." Lamb levy New Zealand’s agricultural industries were only too well aware of the barrier which even moderate levels of tariff could afford. Producers of fat lambs were suffering substantially from the effects of the British lamb levy of only 6 2/3 per cent, and it had been calculated that the E.E.C. tariff of 20 per cent on sheep meats would reduce the farm-gate price 45 per cent. “A spokesman for Canterbury manufacturers recently said that the E.E.C. tariff of 23 per cent would effectively halt the present exports of manufactures to Britain. Why then is a 25 per cent tariff regarded as totally inadequate protection in New Zealand?” Mr Begg asked. Any form of protection conferred on the protected industry a private right to levy a tax on its customers. A tariff had the virtue that it at least put an upper limit on the amount of tax. “I am not one who believes the consumer can be fooled all the time,” said Mr Begg. “I think that tricks

of deception do not endure. I also believe that our consumers, and this term includes all New Zealanders, have a right to a better deal.” The economy was also hampered and its development obstructed by a wide range of other practices designed by their authors for self-protection.

“The motivation for all such arrangements is selfinterest, but it does not follow that they are, in all cases, against the public interest also,” he said. The country paid a high price in excessive costs as a result of many of these practices, and many of them did not come within the terms of reference of the Trade Practices Division of the Department of Industries and Commerce. The department was compiling a record of all such agreements affecting prices and had the power to stop practices considered to be against public interest. “There appear to be good grounds for an inquiry into the whole subject.” said Mr Begg.

“If it is shown that the dimensions of the problems are as great as is suspected, a permanent commission could be established to inquire into and modify or abolish practices which are contrary to public interest—thus restoring a greater measure of competition.”