Effects on New Zealand of the Australian vote

Press, 14 December 1977, Page 26

Effects on New Zealand of the Australian vote

Bv

STUART McMILLAN

of “The Press”

The size of the majority by which the coalition parties won in Australia rather than the win itself will probably be significant for New Zealand’s relations with Australia. The Australian Prime Minister (Mr Fraser) appeared to call the election a year before he needed to on his own judgment — certainly against the wishes of a great many of his backbenchers, and possibly against the advice of some members of _ his Cabinet. His political judgment has now been vindicated. The effect of that will certainly be to strengthen his position within the Liberal Partv and within the coalition. This probably means that he will have his way over protective moves in trade. He is strongly protectionist. Mr Andrew Peacock, who is likely to stay as Foreign Minister, is rather more disposed to give access to the Australian market to foreign countries. With Mr Fraser in a stronger position, Australia will probably have a rash of import quotas and tariff barriers. Some of these are bound to affect New Zealand. A certain amount of the trade across the Tasman is under the New Zealand-Australia Free Trade Agreement. Al! that trade will be exempted from any moves Australia takes. But where the trade is not protected by NA.F.T.A. it, could be affected. The two countries could take action to put some additional items of trade under N A.F.T.A. but progress on this has been slow over the last couple of years. The question of imports was raised during the election. The Labour Party became split on the issue after Senator Ken Wriedt said that a Labour Government would

concentrate on restructuring the economy rather than putting up tariff barriers. The President of the Party, Mr Bob Hawke, said that it was inconceivable that a Labour Government would lower tariff barriers while unemployment was so high. The coalition seized on the issue and promised protection of Australian industry. During 1973 when Labour was in power, it gave a 25 per cent across-the-board tariff cut which produced a flood of imports from Asia, in particular from South-East Asia. Clothing, footwear and textile firms were all hit. The strand of thinking which inspired that move is still present in Australia — the idea that Asia should have access to the Australian market for its labourintensive manufactures. Mr Peacock believes something like that, but however high the moral tone of this view, it is going to be hard to sustain over the next few years. A view close to antiprotectionism was put forward bv the Industries Assistance Commission earlier this year and created a Storm. Even during the election campaign, a special committee under Mr K. M. Archer, a former Government Statistician, was set up to monitor imports of clothing, footwear, and textiles. The I.A.C. view has been disavowed. The three industries employ about 120.000 people. There'was election appeal in offering to protect their jobs. Some of this attitude is bound to affect New Zealand exports to Australia. One aspect affecting Christchurch in particular is that a Parliamentary committee some time ago named the Christchurch office of the Australian Trade Commissioner and Consul-General as one that could be closed to save monev. The re-election

of the coalition might mean that this is put into effect. Mr Fraser has, however, recently given emphasis to increased exports, and since New Zealand is the biggest market for Australian manufactures, he may think again. Mr Peacock himself is well disposed towards New Zealand and gets on well with the New Zealand Minister of Foreign Affairs (Mr Taiboys). His return to the post of Minister of Foreign Affairs would be useful for New Zealand. A continuation of present policies towards defence can also be expected. At the present time, the Australian Defence Department and the New Zealand Ministry of Defence are close, developing the defence co-operation agreement signed earlier this year. In foreign and defence policies, Australia is likely to stick to its present lines. In letters leaked from Washington earlier this year, Mr Fraser showed himself prepared to go to considerable lengths to obtain the ear of President Carter. Whether New Zealand will find itself under pressure from Canberra to adopt the same cap-in-hand attitude to Washington remains to be seen. The only other factor which may influence the relationship between the two countries is that Australia will almost certainly now become a major exporter of uranium. This could mean that Australia will flnallv arrive at the world role it seeks and its influence will veatlv overshadow that of New Zealand. It could also mean that it becomes immeasurably wealthier than it is now. which might push Australian wages higher still and make Australian manufacturers even more uncompetitive in price. The high wages might mean that New Zealanders would leave for Australia in even greater numbers than they are leaving now.