‘N.Z. wants no part of federal system’

Press, 22 June 1984, Page 4

‘N.Z. wants no part of federal system’

By

OLIVER RIDDELL

in Wellington Closer economic relations were not a customs union and would not lead to a political union, the Prime Minister, Sir Robert Muldoon, told the Melbourne Chambers of Commerce yesterday. He was making a flying two-day visit to Australia to deliver the annual Sir Robert Menzies Memorial Address. New Zealand wanted no part of a federal system which was, in some respects, an anachronism in a world of much faster transport and communication as against the time when it had been set up, Sir Robert told the Chambers of Commerce. External tariffs in the two countries would not be harmonised, he said, and there would be no singlecurrency entity. The Tasman exchange rate would be a significant element in competitiveness. C.E.R. would not lead to political union.

Sir Robert said that the main problems had been expected to be with dairying, wine, steel, the motor industry, horticulture, as well as others. The industries concerned were working together to reach agreement.

New Zealand table wines had sold very well in Australia, especially in Melbourne. Wine exports to Australian in the six months July-December, 1983, had been three times as high as those for the July-June, 1983, year. Outstanding problems included preferences in buying by Australian state Governments, passports and Tasman investment, he said. The Deputy Prime Minister of Australia, Mr Bowen, has shared the regret of the New Zealand Government on the passport issue. On investment, Sir Robert said that if the increased trade generated by C.E.R. were to run smoothly in either direction, businessmen in each countrey would need to be able to invest

freely in the other country. Australia had virtually a total prohibition on investment in resource-based industries, he said, whereas the opposite was the case in New Zealand.

Australia required the company to be taken over to be advertised in case an Australian buyer wished to make a bid; New Zealand had no counterpart for this. He said many of the examples that had arisen had been farcical in business terms, and impossible to justify in economic terms.

Sir Robert said it was of particular concern that the National Bank was the only New Zealand trading bank that could not service its New Zealand customers in Australia.

Historically a very large slice of the total financial sector in New Zealand was in Australian hands, including two of the four trading banks, which caused New Zealand no concern.

The problem of investment regulations remained the most important out-

standing item for C.E.R. On A.N.Z.U.S., Sir Robert made an indirect dig at the New Zealand Labour Party. He commended the Australian Government on the manner in which it “threw overboard some of the baggage that they brought from their Opposition days” and had supported the A.N.Z.U.S. concept with total enthusiasm.

Sir Robert assured Australian businessmen that it would cost New Zealand too much to devalue the dollar now, the Press Association reported. He said that with the Reserve Bank still selling forward currency, both the bank and the State corporations would have to be compensated if the dollar were devalued.

He told questioners after his address that New Zealand was in the process of removing direct subsidies and moving away from direct export incentives, but was having trouble getting the message across in Australia.