Controlled imports to be cut by one-third

Press, Volume CXVI, Issue 34119, 3 April 1976, Page 3

Controlled imports to be cut by one-third

t.Vzhc Zealand Press Association) WELLINGTON. April 2. Controlled imports will be effectively cut 30 per cent under the new import licensing schedule announced today by the Minister of Trade and Industrv (Mr Adams-Schneider).

While the schedule for 1976-77 provides an allocation of 100 per cent of the licences issued last year, when the devaluation of the New Zealand dollar and increases in the prices of imports are taken into account, the volume of goods brought into the country under the schedule will be about onethird less than last year. Mr Adams-Schneider said ;the schedule, which will come into effect on July 1, had been prepared in a “climate of the most serious downturn of New Zealand’s terms of trade since the war." ' But the Government’s actions would ensure that imj ports still ran at a level I sufficient to maintain production and employment wijthin this country. The schedule provided for (curtailment of imported 'goods used in substitution (for New Zealand-made products, and this should ensure treasonable levels of production and employment and, as a bonus, save overseas exchange, the Minister said, i The volume of goods imported was reduced by the new schedule, the amount ot overseas funds spent was expected to increase slightly. The Department of Trade and Industry predicted that when the present import year ended on June 30, New Zealand’s total imports for the year would have cost about $2500m. Its present estimates for expenditure on imports under the new cr-hnHi ilo worn tr

s2Boom. Deficit fallen “From its peak 1975 levels,, the current account (deficit has fallen to $964m — an improvement, but one Iwhich is still just under half ■our export income,” Mr Adams-Schneider said. ' “Further improvements in our balance of payments are i expected in the coming

• months but the small inI creases' in expojgt' prices are . being eroded by the contin- ■ uing trend for import prices I to increase by an Organisa- ■ tion for Economic Co-oper-lation and Development estimate of about 9 to 11 per 7 cent. “As a consequence, i effective improvement in our 'overseas trade transactions is attainable only if import ' I levels are contained during the coming months.” Mr Adams-Schneider said . the Government was fully aware that about 70 per cent 1 of all imports still remained 1 in the exempt area, but he said fiscal measures had already been taken (o damp s down demand. s Mr Adams-Schneider des--3 cribed the new schedule as “tight”, and said it had been . “dictated by circumstances which necessitated remedial .] action.” He had given due weight . to the concern that too drastic an action could have had r ! widespread repercussions in production employment n (levels.

Options

The Government had had several options. Licensing could have beep reimposed on commodities which were exempt, or import surcharges could have been imposed, he said. The latter had been rejected because of its contribution to inflation, and instead the Government had introduced the import deposit scheme. He warned manufacturers that applications for imports of capital equipment would be subject to tight policies, except where the machinery would help in the development of exports.

Several items had received an allocation below the schedule level because of increased domestic manufacture, or because high stocks already existed within the country. On this basis, items such as bicycles, canned pineapple, tyres, and manchester goods had reduced allocations. Footwear licences under

the new schedule had been reduced by placing shoes on a value basis. Footwear licences had previously been issued on a pairage basis, and higher overseas costs i had thus not affected the volume of footwear imports. 1 Toys, small electric motors, and some grinding wheels .and discs had also been given reduced allocations and applications would be considered on their merits. Cars As forecast in a speech byMr Adams-Schneider earlier this week, the licences fori i i t i i t

cars remain the same. The ; schedule continues the “rei placement” licensing scheme for New Zealand assembled (c.k.d.) cars, and the provi- ; sion for "traditional” importers of built-up cars is (continued at 100 per cent of (last year’s allocation. The Minister said that, with the exception of footwear, the National Government would honour assurances given by Labour for the range of items covered by the three-year licence assurance scheme. Licences surrendered under the surrender scheme could be redeemed to 100 per cent of the amount surrendered.