‘Tardy’ use of clothing plan causes anger

Press, 26 November 1980, Page 10

‘Tardy’ use of clothing plan causes anger

PA Wellington New Zealand consumers are being starved of imported clothing at the same time as the domestic garment industry is reducing its range, the Deputy Director of the Retailers’ Federation (Mr T. A. Currie) has said. Fashion and other clothing retailers were becoming angry and impatient, he' said, at the distortions occurring in the market. These distortions are due to the Government’s tardiness in implementing the Textile Industry Plan according to the timetable set out by the Industries Development Commission.”

Mr Currie said that, although clothing manufacturers were saying that the plan, designed to allow clothing imports up to 10 per cent of the total domestic market over a full year, was responsible for disrupting the industry and the Toss of thousands of jobs, the truth was different.

“Garment manufacturers have benefited considerably from the steps of the plan implemented so far. Consumers have not benefited at all. rather the reverse,” he said. “Manufacturers have greatly improved access to imported fabrics at concessionary duty rates and most fabrics are no longer under import licensing, i This should have considerably reduced the cost pressures on manufacturers and consumers should by now have been receiving the flow-on effects.” He said that the benefits accruing to manufacturers were not being passed to the consumer. Instead, textile and clothing manufacturers were producing smaller selections, saying that the plan was causing uncertainties and therefore lack of confidence in the industry. “On the other hand, said Mr Currie, “the parts of the plan implemented so far are working against the interests of the consumer, mainly because the Government has delayed the textile tendering scheme which should have been operating by now.” He said that since

August higher duty rates on imported garments had reduced the number of clothes imported under global licences and, also since August, no garments had come from Australia under the New ZealandAustralia Free Trading Agreement on clothes which ended then.

“Instead of having to compete against 10 per cent imports, which the textile plan envisaged, the local garment manufacturing industry has captured the entire market, apart from the few imports coming in under global licences,” said Mr Currie. The N.A.F.T.A. arrangement had been expected to continue, accounting for up to 4 per cent of the domestic market. The textile tendering scheme, plus global licences, should have accounted for the other 6 per cent by now. “Instead, the tendering scheme is not expected to begin operating until late January. It will then take two months before the successful tenderers are notified, making it touch and go whether they will be able to land any imports for the next winter season.

“This means that the New Zealand market has been starved of imports for more than two buying seasons, as N.A.F.T.A. imports virtually ceased from December last year.” The high rates of duty on imported garments since the new licensing year began in August had been designed to test the effectiveness of the tariff bv working in tandem with the tendering scheme. The tendering scheme would involve the payment of a premium by the successful tenderers. This would act as a kind of additional tariff and if the importer found'these costs inhibiting, said Mr Currie, the textile industry plan would envisage the progressive lowering of the tariff until an arrangement was made. “This has the effect of affording the domestic garment manufacturing industry -even greater protection than existed before the plan was evolved,” he said.