Transport, electricity worry producers

Press, 17 November 1981, Page 21

Transport, electricity worry producers

Both the Chamber of Commerce and the Manufacturers’ Association cite transport costs and electricity prices as the two major difficulties facing Canterbury’s producers. Total transport costs are about two per cent in favour of North Island manufacturers which export to Christchurch over their Christchurch counterparts exporting to Auckland. And while Canterbury manufacturers send about 80 per cent of their products overseas or to the North Island. Auckland’s manufacturers send only about 20 per cent of their products out of the North Island. As the chamber’s president, Mr Greene, puts it: “Anything to help with transport costs would be welcome." The chamber’s executive director. Kelvin Willis, says

that to increase processing industries, Canterbury must have access to alternative cheap fuels within the next decade. Growing sugar beet to-produce ethanol is a fourtimes more' productive use for land than current agriculture, he adds. The manufacturers' president, Mr Bowron, goes further to suggest that South Island industry should get electricity under the same terms as planned for the Aramoana smelter, especially if the smelter does not go ahead. Labour and Social Credit both promise additional transport subsidies. Social Credit will go ahead with electrification of the railway line from Christchurch to Picton and will reinstate the Wellington to Lyttelton ferry, Mr Davey says. Labour is hedging its bets by promising to reinstate the ferry only on a trial basis to

see if it proves economically viable. “The National Government has accepted the validity of the South Island claim that it needed a boost to its competitive chances so it introduced a 25 per cent electricity discount to industries which have electricity as a significant part of the’ir production costs,” Miss Richardson says. The’ Government also recognised transport costs disadvantaged Canterbury manufacturers so it introduced a 1214 per cent discount on the Cook Strait rail ferry for goods travelling from south to north only. “But the National Government rejects the notion that it is doing industry a good turn by subsidising industry that can’t make it on its own,” she emphasises. "The Government is not going to be. a permanent wet-nurse to industry."

She also cites the Lyttelton ferry as a prime example of Government funding an inefficient industry to the detriment ot normally competitive coastal shipping services. Labour has taken up the manufacturers’ suggestion of an “iron bridge” freight costing system which would el-, iminate the added expense of paying for the Cook Strait crossing as a separate trip just because it goes across water, not land. Mr Willis believes that many Canterbury manufacturers bring transport costs on themselves by trying to compete unsuccessfully in the Auckland market against an identical Auckland-pro-duced product. He says local manufacturers should pick their market more carefully and look more to overseas than to the North Island. . The' most distinctive plan for alternative South Island

energy is Social Credit's promise to run a pipeline from Taranaki to supply compressed natural gas to Christchurch. Mr Greene says the National Government has erred by bringing wholesale liquid petroleum gas to the South Island at Lyttelton.- It should only be available to essential industries, and electricity should be used everywhere else. This would encourage locally developed alternative fuels to become more competitive. Mr Greene also says that Christchurch needs a better deal for airport dues and that the runway extension is vital to Canterbury’s export future. The Government, after holding off approval for the runway extension at an added cost of ?2 million, has asked for a review of the proposal.

Mr Caygill says that this is a prime example of the Government’s neglect of Canterbury, and promises that Labour will restore airport dues to their proper level. Attitudes on the state of Canterbury's manufacturers and exporters differ. “Canterbury’s industry is traditionally conservative and has been slow to grasp new opportunities,” Mr Greene says. But he thinks manufacturers are wising up. “There is a certain amount of bad mouthing and despondency but most of it is misplaced.” he adds. “If a lot of people talk about it, it becomes a self-fulfilling prophecy,” says Miss Richardson. in agreement, adding that the agricultural heartland has never been in better spirits. But Mr Bowron would agree with Labour that the

mmanufacturers really have been down in the dumps, and only the picking up of the economy in the last six months’ has' raised their spirits. Mr Greene suspects that the Social Credit and Labour emphasis on building up small businesses may not work because the internal market will not support that many businesses. Mr Caygill agrees that the domestic market will still have to absorb 80 per cent of all manufacturing output even with the optimistic predictions of boosting exports to 20 per cent. This would be achieved by controlling domestic and transport costs, taxation, and concentrating on international marketing, he says. Mr' Greene . says the National Government has been slow to heed any call to assist Canterbury’s manufac-

turers and exporters, like over the airport runway extension. The last word goes to the manufacturers. “It is true that existing industry in Canterbury will get some spin-off from the aluminium smelter and Tiwai,” Mr Bowron says. "Nevertheless, this will be insufficient to overcome Christchurch’s serious unemployment problems. Nor will it halt the migration of industry and people to the north. It will do little to assist in maintaining our city’s infrastructure. “So what is essential in any industrial strategy is special attention to regional needs. Stimulation of new and existing industries is the best means of regional development “Unlike the dramatic new projects, .existing industry has already proven itselt."