Import cost soars; curbs forecast

Press, 7 December 1976, Page 2

Import cost soars; curbs forecast

PA Hamilton 1 i > The Government may i announce new import , restrictions early next j year in a bid to hold 1 down the cost of imports ’ —which has risen about ,; S2OOM according to thej' latest trade figures. II The Minister of Trade andi: Industry (Mr Adams-Schnei-1 der) said from Wellington! yesterday that the Govern-i inent would be reviewing its ! imports policy soon. A re- i: view of importers’ licensing I requirements was already;' tinder way. The director of the Manu-i facturer’s Association (Mr'l John Whatnall) said from; Auckland that industry was aware that the Government: might be forced to impose I new direct import control h

1 measures if the present policies failed to dampen internal demand. The latest figures from the Statistics Department show that the cost of New Zealand's imports for the full trading year to June, 1976 were up about 7 per cent, or |$l9OM. ' The latest annual total for I imports is 52927 M, com-! (pared with $2737M for the (similar period in 1975. I The latest monthly figures ' — for July — put the cost I of imports for trwe month at 15277 M, companed with i$227M in July last year. Mr Adams-Schneider said ithat greater direct controls (would be one of the options that the Government would ’be considering. “We are worried about the import costs, but we have (no magic formula,” be said. “Fm not keen for more 'direct controls, but the Gov-

ernment must consider every option open to it.” At present 30 per cent of New Zealand’s imports is under import licensing controls, while 70 per cent — mainly raw materials and machinery — is not directly controlled. The Government was committed to full employment, (and was aware that a cut in raw material imports could lead to lay-offs in industry, said Mr Adams-Schneider. By leaving the value of licensed imports at a similar level to the previous year, the volume of imports had already suffered a 40 per cent reduction.

He conceded the import deposit scheme had led to (only “minimal” savings on 'the 6 to 7 per cent of imports it covered. The value of the items affected had held steady after rising constantly in the past. The' new import licensing schedule would probably be announced early next year and take effect from July 1, he said.

i Mr Adams-Schneider said that New Zealand might face adverse reaction from other tnading nations if it imposed injport controls. He said the Gwernment would probably opt to further dampen internal demand through tight monetary and fiscal policies. Mr Whatnall said that the Government’s “tight money” policies had been taking effect only slowly. “We are watching the position closely,” he said. ‘“lf there was any move to curtail imports in the licensing area, we would push for ccntroi over the whole range of the import payment area. ‘The economy at present is balanced on a knife-edge.” He said the new imports policy was expected in February or March, and manufacturers’ representatives were expected to have talks with the Government about Hhe issue early next year.