Move 'weakens’ export trade

Press, 24 May 1985, Page 4

Move 'weakens’ export trade

PA Wellington The fate of export projects on the drawing board is uncertain after the decision to phase out export market development tax incentives from 1987, according to the Manufacturing Exporters’ Council.

The council’s chairman, Mr Barry Brill, said he was disappointed with yesterday’s announcement even though pending projects would probably still con-

tinue. With the major export performance incentive already disappearing, the Government was signalling to manufacturing exporters that the community placed little value on the export drive, he said.

“The Government’s motive in weakening export marketing, where everyone agrees New Zealand’s efforts should be concentrated, is difficult to follow.”

Marketing costs had increased overnight after devaluation and would increase a further 40 per cent when the incentive was abolished.

“My concern is that the emphasis will be removed from value-added goods that require concentrated marketing, and we may go back to commodity trading." Mr Brill said nothing would remain to offset the heavy tax burden that New Zealand goods carried com-

pared with those of their overseas competitors. He said he also knew of no case where export marketing assistance was the target of successful countervailing action by other countries.

“But at least an incentive to sell more overseas will' continue in the meantime and possibly the new Marketing Development Board might persuade the Government that it should be retained,” Mr Brill said.