An improved bill on State trading

Press, Volume CXIII, Issue 33254, 18 June 1973, Page 12

An improved bill on State trading

Amendments to the New Zealand Import-Export Corporation Bill by the Commerce and Mining Committee of Parliament will appease some of the objectors to the legislation, but by no means all of them. In its new form, the bill defines more clearly the object of the corporation, which is to “ promote and encourage the development of the “ overseas trade of New Zealand "; the bill makes it clear that this encouragement will be given by way of assistance to exporters and importers who lack adequate resources. These are the objects—and worthy ones—on which the Minister of Overseas Trade (Mr Walding) laid emphasis in his several defences of the bill: they were not clear from the sweeping and general powers accorded the corporation in the original draft.

The revised version provides that the corporation may act on behalf of persons or organisations, including the producer boards, only when they request it to do so. The specific reference to bilateral trading agreements, with its implications of unsatisfactory barter deals, has been dropped. The corporation is specifically excluded from entering the retail trade in New Zealand. It retains the power to acquire shares in any company, but only “ for the attainment “ of its general object ”, Concern that the corporation might have become a vehicle for progressive nationalisation is probably meant to be allayed by a new final clause: “The “ corporation is not an instrument of the Executive “Government of New Zealand”. This unusual addition to the bill does not prevent the Government from giving directions to the board—and the provision for the Government to appoint all eight directors has not been changed. Nor have the general financial provisions been altered. This is the area where further amendment is surely needed. While it is now made clear that the corporation must pay rates and taxes —a proper requirement if the corporation competes with private firms — the corporation retains unlimited power to draw on the State's financial resources, subject only to the approval of the Minister of Finance. No further authority than that contained in the bill is required for appropriations from the Consolidated Revenue Account. This is a remarkable diminution of Parliament’s authority in appropriating revenue. At the very least an upper limit should be placed from time to time on the “ working capital ” of a corporation which is expected to show a profit.