N.Z. should get closer to Australia — editorial

Press, 27 March 1979, Page 7

N.Z. should get closer to Australia — editorial

NZPA Sydneyi “The Australian Financial | Review” has advocated the’ speeding up of economic in-1 tegratioh between Australia! land New Zealand. I In an editorial headed.' “High noon for Muldoon,” l the newspaper criticised! “the cumulative failure of! politicians to grasp the 1 nettle,” and said the situ-1 ation needed to be “cleaned up” in the next two years. "Australia has a vital interest in seeing a revival of the New Zealand economy,” it said. Apart from being Australia’s most important market for manufactured goods, there were strong political, cultural, defence and economic reasons for wanting to see a strong Tasman partner. “If New Zealand’s cosseted, controlled industries are to be helped out into international markets without electorally damaging dislocation and unemployment, an obvious first step is guaranteed access to the Australian market,” the editorial said. There was much reluctance on the Australian side to take much in the way of substantive action under the New Zealand-Australia Free Trade Agreement (N.A.F.T.A.) it said. “The comment tends to be that closer relations are a good idea some time, but not yer, particularly with

lAustralia’s current employ- s iment difficulties. The short- i isightednesj of this attitude t | indicates clearly that New t |Zealand's politicians are not | the only ones who badly J need shaking up. If any .Australian firm is unable to. llcope with competition from i Auckland, Wellington or I Christchurch. let alone Dunedin or Invercargill, we I are better off without it. "The curious fact is that the economic problems which have hit New Zealand • are not of the country’s own making. On the face of it, there is no reason for politicians to be so sensitive or , defensive about, a situation which has, after all, been wished on them by outsiders,” the editorial said. The Prime Minister (Mr Muldoon) or for that matter, the Leader of the Opposition (Mr Rowling) had not proi pelled Britain into the Common Market, or underwritten the huge E.E.C. subsidisation of marginal, uneconomic European farmers with their t piled-up export surpluses. “The quadrupling of oil prices by the O.P.E.C. cartel in late 1973, the steep fall in the terms of trade from agricultural products, the rising industrial challenge from East Asia and the cur- : rent Iranian oil difficulties, ail arise from events ex- ; ternal to New Zealand. W'here New Zealand’s politicians have missed the bus is In failing to draw the neces-

sary conclusions from these fundamental alterations in their external environment,” the editorial said. “New Zealand’s major export asset is not butter, or cheddar cheese, or . dried milk, as such. Dairy products are merely one intermediary. The primary resource is good rainfail and fertile agricultural land. The problem is to find those products, whether they are fat lambs or lean beef, frozen kiwifruit or New Zealand white wine, wool carpets or sheepskins, which provide the best returns in those markets which are available or can be won through negotiation. “On the industrial side, New Zealand is paying a high price in terms of restricted market choice and low industrial productivity from its current system of high import licensing on most finished manufacturing goods. Like Australia, it faces the task of restructuring this industrial set-up to produce a more specialised, longer run, export orientated manufacturing sector, one which does not have to be propped up all the time,” the editorial said. “Australia has a vital interest in seeing a revival in the New Zealand economy. In the first place, it is the most important

single overseas market for Australian manufacturers. However, it can hardly be expected to import more goods when it is already in balance-of-payments difficulties, faced with a large oil import bill and steady overaea! borrowing. It can be expected to take more Australian products only when it is successful in increasing its export earnings, whether from primary produce to Asian markets, industrial exports or tourism earn-

ings.” The reciprocal advantages from pressing ahead with economic integration could be seen in greater variety of merchandise as well us specialisation, in interchange of components as well as finished goods, and in mutual enlargement of markets," the editorial said. "For Australian manufacturers. u>e guaranteed access to an extra market of 3.1 M would be a useful addition to the Australian base market to underwrite export-led growth in other markets. For New Zealand manufacturers, the guarantee of access to the Australian market would provide an even more important addition of 14.3 M people to the small base market they currently have in New Zealand,” it said.