Inquiry welcomed

Press, 29 April 1981, Page 22

Inquiry welcomed

Dunlop New Zealand, Ltd. welcomes the inquiry into the tyre industry by the Industries Development Commission, said the chairman. Mr J. E. S. Hammond, at the annual meeting in Wellington yesterday.

The commission's terms of reference required it to take specific account of the potential of the tyre industry to contribute to' the economic growth of New Zealand, and to recommend a development plan for the future. “Its outcome must help to reduce the climate of uncertainty which is one of the major deterrents to the group's investment programmes.’’ Dunlop believed that the tyre industry, as an import substitution industry, had no less a contribution to make to the economic growth of New Zealand, than the export activities such as the Starlite and Shelter companies contributed in Dunlop, Mr Hammond said. “We realise that there are some who would wish the commission to adopt the free market approach. “I hope that we will be successful in persuading them that the free market approach can only be sue-

cessful in cultivating an improvement in economic growth only if the Government commits itself to freeing up the economy on a broad front. That means letting free market forces determine the overseas value of the New Zealand dollar, unencumbered by award legislation. determine wage rates, and letting the private sector take over more functions from the State so as to reduce the inhibiting influence of high taxation on investment decisions."

In the final analysis political judgment on protection must involve a fine balance between the benefit to consumer of the free market philosophy and the practical implications of a managed economy, he said. What was disappointing was while a thorough and meticulous inquiry was planned by the 1.D.C., less disciplined decisions were being taken in advance of the findings by other parties. “I refer to the growth of import licences for steel radial truck tyres.” These tyres were being imported at concessionary rates of duly. Dunlop agreed that there were some uses where these tyres were an advantage, but it was waste-

ful of the country’s foreign exchange resources and its labour resources to encourage the importing at concessionary rates when a locally made tyre could adequately fulfil needs. Mr Hammond said. Mr Hammond has been transferred to Nigeria, after 13 years with Dunlop New Zealand, and his place has been taken bv Mr W. Evans.