THE PRESS SATURDAY, MARCH 29, 1980. Industrial opportunities

Press, 29 March 1980, Page 14

THE PRESS SATURDAY, MARCH 29, 1980. Industrial opportunities

Mr F. Turnovsky, the president of the New Zealand Manufacturers’ Federation, in his report to the federation’s convention in Christchurch this week, raised the question of equality of opportunity between New Zealand and Australian manufacturers. The point is important because the Governments and the manufacturers of both countries, having at last got away from the path of expecting someone to make decisions about which firms or industries should die, are now following the saner path of allowing the market to make the decisions. For that to happen, however, everyone should be allowed a fair go, neither having a built-in advantage nor a disadvantage. Equality of opportunity is thus at the very heart of closer economic ties between New Zealand and Australia.

Would equality of opportunity permit the transfer of a wide range of New Zealand industries to the larger and more affluent market across the Tasman? Mr Turnovsky hints that Australia regards this as acceptable but New Zealand manufacturers do not. He cites the drift of industry north in New Zealand as illustrating what could happen. If such a movement of major industries in New Zealand did occur across the Tasman, New Zealand would find itself in a sorry state. It would lose population even faster than it is already and it would fail to attract investment to better itself. New Zealand would be likely to become a supplier of raw materials to these transferred industries. Of all the factors which would cause the drift, that of freight rates is the biggest. Recently changes in measuring air freight have compounded the difficulties of exporters already troubled by high sea freights. Clothing manufacturers have been badly hit by the air freight changes.

As the countries move towards freer trade, some measures are going

to be necessary to come to terms with the problems of freight and the different sizes of base markets. It would be unhealthy for New Zealand to see its industries disappear across the Tasman and its people follow them. Besides, Sydney and Melbourne are big enough as they are without accommodating New Zealand industries and industrial workers. If the countries are going to be regarded as one market—and that is likely to be the outcome eventually—the Governments will have to consider forms of regional development. It is not a problem simply between New Zealand and Australia but one which affects one district as opposed to another within both countries. There is already a freight subsidy between Tasmania and the mainland of Australia. That is one form of regional assistance which can be examined.

Mr Turnovsky happily and soundly dismissed the view that New Zealand should permanently have a lower wage structure and that its cost advantages should be based on that. A former trade minister in Australia once said that Australia could not afford to have a slum on its back doorstep. He was probably referring to social problems but it is doubtful whether New Zealanders would not continue to leave the country in growing numbers for higher wages. Industry should, as Mr Turnovsky said, look for its cost advantages in the best uses of resources and skilful management rather than an acceptance of depressed living standards, The difficulties of sorting the problems out are real. They have not been brought about by the talks between the two Prime Ministers last week and they need to be resolved whether there is a new economic association or not. The optimism about the country, which Mr Turnovsky also expressed, is a good point from which to start tackling the problems.