N.Z. seen as cheap factory

Press, 23 April 1984, Page 1

N.Z. seen as cheap factory

NZPA Melbourne Many companies in Australia are finding that they can produce their goods more cheaply in New Zealand, where manufacturing costs are lower and then bring those products into Australia, says the Victorian Employers’ Federation. In its weekly Employers’ Report, the federation said Victoria would be in real danger of losing its manufacturing industry unless the Federal and state governments radically changed their policies. The federation said the reason .for all these moves across the Tasman was simple economics: • High state charges such as payroll tax and workers’ compensation premiums were forcing companies to look for countries which did not tax their enterprises out of existence. Payroll tax was unheard of in New Zealand and compensation premiums were very low by Victorian standards.

• New Zealand’s export incentives far exceeded Australia’s, which were far below those of most of its international competitors.

• New Zealand’s inflation rate was less than half Australia’s which meant wages and labour costs were much lower. The federation said for many Victorian manufacturers, moving to New Zealand was just like moving to another state, but with considerable financial benefits. It said as a matter of urgency to encourage Victorian manufacturers to stay in Victoria the Federal and state governments should reintroduce the Export Expansion Grants Scheme and guarantee the continuation of all existing export incentive schemes. They should also investigate export and other manufacturing incentive schemes used overseas to see if any could be adapted, and reduce state government charges and taxes to neutralise the advantages of moving overseas.