N.Z. criticised for import curbs

Press, 24 July 1985, Page 8

N.Z. criticised for import curbs

By

MICHAEL HANNAH

in Wellington New Zealand’s import controls came under fire yesterday as probably the highest tariff barriers in the O.E.C.D. New Zealand was the only developed country to maintain a comprehensive system of quantitative controls on imports of manufactures, the O.E.C.D. said in its annual assessment of the New Zealand economy. It acknowledged that the Labour Government was speeding up the process of liberalising import access, however, by increasing quotas through a wider tender system. Import controls and compulsory unionism were highlighted in the O.E.C.D. report as inconsistent with policies O.E.C.D. Ministers of Finance had endorsed. The report noted that the Government had given way to trade union pressure to revert to compulsory unionism, and said it was concerned about such “rigidities” in the labour market.

Compulsory unionism was likely to lead to a worse trade-off between inflation and output, the report said. However, it considered that greater flexibility in other areas of the economy should add pressure to break down rigidities in the labour market. The labour market was the area most likely to cause problems to a rapid adjustment of the economy, it said. The report suggested that a well thought-out policy of reform of the labour market should be given a higher priority by the Government. It saw some hope of achieving flexibility through other areas such as union registration rules and the system of national award coverage, as well as through wider economic and structural policies. It noted that a Green Paper was to be presented by the Government on industrial relations later this year, and suggested this should look at the whole gamut of legislation in the labour market area.