Call to support Govt on tariffs plan

Press, 2 May 1984, Page 7

Call to support Govt on tariffs plan

A call for manufacturers to support the Government in its plan to move from the system of i®port licences to tariffs came yesterday from the Minister of Trade and Industry, Mr Templeton. Speaking to the Canterbury Manufacturers’ Association in Christchurch last evening, Mr Templeton said the Government did not want to have to impose a new tariff-based system. He said the move was very much in the interests of manufacturers and of the country. The change should be made with co-operation and consultation between the groups involved. Mr Templeton, who was accompanied by several senior Government officials, was in Christchurch for the second in a series of meetings around the country with local Manufacturers’ Associations.

The meetings are being held so that manufacturers can debate a paper outlining proposals for the transition from import licensing to tariffs.

The paper, entitled “Import licence tendering and tariff testing procedures,” provides for a gradual change over four years. During the first two years there will be a system of

tendering for import licences and the average successful premiums must be lower than 7.5 per cent There will be licensing on demand for a further two years, during which time premiums will be monitored to ensure that the system is working. After that the system of import licensing will be removed completely. The Government negotiated the proposal with the Manufacturers’ Federation during a series of “summit” meetings last year. Mr Templeton said that he was fairly confident that manufacturers would accept the proposal. They had accepted the basic concept at the federation’s annual meeting last November, but had wanted to see the “fine print.” He hoped the series of meetings with the Manufacturers’ Associations would be finished by the end of May. Then he would start on a similar series of meetings with industry groups. Mr Templeton said the Government wanted the manufacturing sector to grow to be one of the twin pillars of the economy. It wanted manufacturers to double their export earnings by 1990 and to create new jobs.

The plans had to be put in place now, so that manufacturers were in a position to start growing. No matter how well the system of import licensing had served as a protection for New Zealand industry, it had to be modernised if manufacturers wanted to take advantage of wider markets. The need had been brought about because of the increased competition caused by closer economic relations with Australia. Under C.E.R. and G.A.T.T., New Zealand was committed to changing its export assistance system.

The Government believed New Zealand had to bring its systems of protection in line with those in the rest of the world if New Zealand wanted to export overseas. New Zealand industries had to look to exports because there was no use investing in new developments and technology solely for the New Zealand economy.

Mr Templeton said the move was also needed for the parts of the economy which had not already been covered by industry studies. The proposal for the transition from import licensing to tariffs aimed to allow the

manufacturing sector to develop and grow, but at the same time to give it stability and to set realistic targets. The Government guaranteed that it would come up with other forms of assistance if they were necessary and promised that the new tariff system would have adequate safeguards. Earlier in the meeting, the president of the Manufacturers’ Federation, Mr Earl Richardson, said that the Government had agreed to “show good faith” by removing some of the disincentives facing manufacturers if they agreed with the tariff proposals. The disincentives included the sales tax on plant and machinery, the present system of depreciation and investment allowances. Manufacturers also wanted more help in research and development and an economy where inflation and interest rates were controlled. Mr Templeton said later that the Government would move in some of the areas, although manufacturers could not expect the changes “in one stroke.” They would get a clear indication of the Government’s plans in this year’s Budget.