N.Z. calls off motor talks with Aust.

Press, 10 September 1983, Page 5

N.Z. calls off motor talks with Aust.

NZPA staff correspondent Sydney New Zealand has called off talks planned for next week on the future of the car industry under Closers Economic Relations because-’ of Australia’s stand on Tasman investment. The Australian Minister of Trade, Lionel Bowen, told Parliament in Canberra on Thursday that the talks had been postponed at New Zealand’s request, and confirmed that this was because of the investment issue.

Mr Bowen said the section in the talks relating to motor industry rationalisation would involve an alteration of tariffs in New Zealand and that could affect employment in Australia, especially in South Australia. The New Zealand Prime Minister, Mr Muldoon, confirmed on Thursday evening that the talks had been called off in the meantime because of the difference in investment policies.

The car industry talks had “got to be done in conjunction with the question of investment between the two countries,” he said. “We should wait until we get some response on investment.”

The talks would have been over the assembly of General Motors Holden and Ford Australian cars in New Zealand Mr Muldoon said that these were both foreign-owned companies in Australia.

“It is very much bound up in this question of foreign investment,” he said.

Sources in Canberra said that the car industry question was mentioned in the C.E.R. agreement, but the details were left until New Zealand had completed its review of the motor industry there.

The sources said that once the Industries Development Commission review had been finished, the Australians suggested that it was time to sort out the vehicle question, and the matter was included on the agenda for an important meeting in Wellington next week on post-C.E.R. issues. But while those talks will still go ahead, with senior officials from Canberra going to Wellington to meet their New Zealand counterparts, the New Zealanders have asked that the motorvehicle question be left out. The reason, according to the sources, was that New Zealand wanted to see what the Australians would come up with on the Tasman investment issue. New Zealand has complained that Australian restrictions on investment in Australian companies — which limits shareholdings in most cases to 50 per cent and insists that Australian interests get first option to buy any Australian firm offered for sale overseas — as well as Australia’s refusal to allow the Britishowned National Bank of New Zealand to open branches on this side of the Tasman, were contrary to the spirit of C.E.R.

The Australians denied that New Zealand was being disadvantaged, and the Aus-

tralian Treasurer, Mr Paul Keating, refused to budge when Mr Muldoon broached the subject during his visit in. June.

Mr Muldoon again raised the issue in private talks with the Australian Prime Minister, Mr Hawke, during the South Pacific Forum in Canberra last week, and pronounced himself satisfied that Mr Hawke understood the situation better.

Informed sources expect the Australian review of its foreign investment policy to be finished within a fortnight, but it is not known what effect Mr Muldoon’s talks with Mr Hawke will have on the matter, as the Treasurer is regarded to be determined to keep his independence on such policy matters.

Mr Muldoon has insisted that the matter is not a political one but rather one of poor information from the Australian bureaucracy, and to encourage the Australians to look at the matter in the proper light, Mr Muldoon froze Australian investment proposals in New Zealand from May.

He has likened the Australian attitude to the Brit-ish-owned National Bank’s getting access to Australia to Australia’s position of access for the Americanowned carmakers, Ford and General Motors, in New Zealand. With General Motors Holden in particular in deep trouble in Australia, with hundreds of staff being laid off, Mr Muldoon now may have touched a raw nerve with his latest move.