Levy abolition, lower diesel price sought

Press, 18 March 1988, Page 5

Levy abolition, lower diesel price sought

The Fishing ' Industry Association is seeking a reduction in the base price of diesel (fuel and the removal of the Marsden Point levy (to allow the domestic fishing fleet to compete with foreignlicensed vessels.

The association president, Mr David Anderson, told the annual conference in Nelson], that the industry paid an excise tax of 23.2 cents' per litre, w;hich incorporated the Marsden Point Itevy and a volume related] j tax. In many cases the j levy amounted to 50] per cent of fishing companies' total fuel costs. . I i Mr Anderson] said the tax was incurred by the domestic fishing fleet and charter or joint venture vessels, but foreignlicensed vessels were not required to pay it. The foreign, charter and jointventure vessels also paid a , lower base price for fuel than the domestic fleet.

( "It is another example of being nice to the foreign nations,", he said. 'Tn the current economic conditions the extra burden of the current taxes is too much."

Mr Anderson said the industry and a large oil company had developed last year a marine diesel fuel which was “of such characteristics to be exempt from the Marsden Point levy.” “For some months the industry had the benefit of this fuel but we believe competing oil companies, to use a term, 'potted' the developer and because it was difficult to differenti-

ate the fuel from gas oil, Customs moved quickly to place an embargo on any further supplies being produced which effectively cut the rebate to the vessel operators."

Customs was adamant it did not want any part of the new fuel and effectively prevented it from being produced. "Having taken away virtually all incentives or subsidies to the New Zealand industry over the last two years, this would have seemed a positive way of providing a boost, to the fishing industry.”

However, the Government had “closed off that nvenue" and inequalities remained.

Mr Anderson also urged fee Government to prowide continuity and stability in the exchange rate because current exchange levels were causing irreparable damage to the fishing industry.

Prices of prime species such as orange roughy, snapper, crayfish and tarakihi had plummeted and profitability had dramatically reduced.

' If the current exchange rate . stayed at the same level for a further six to nine months, previously viable businesses would reduce production. Mr Anderson said. Some might : close and would certainly reduce staff. The financial environment was chaotic and was sending the manufacturing industry down the drain, he said.

"Our plea to the Government is to provide some continuity and sta-

(bility in our exchange rate. In a country of three (million, a floating exchange rate will not work; (it is too easily manipulated. The only way to (bring interest rates down (is! to control them by (Government decree.”

The Minister of Fisheri ies, Mr Moyle, who ad- ' dressed the , conference ; yesterday appeared to I have some! sympathy for

] the association’s argument about the excise duty rates. However, he rejected the call for a managed exchange rate.' ' - | Mr Moyle said he had passed on the fishing industry’s concern about the diesel tax to the Minister of Finance, Mr Douglas, for consideration in the current Budget round. It was an issue of import- ' ance also to the arable ] farming industry. Mr I Moyle said.

| He said the tax raised 596 million a year. However, he could understand the disadvantage it placed the New Zealand fishing fleet at, in competition with foreign vessels. Mr Moyle dismissed, however, the suggestion the Government should intervene to lower the value of the dollar, saying the “cost is simply too high." If the dollar was brought down artificially beyond its natural movement it would simply fuel inflation and risk renewed cost and wage pressures.. “What we all want to see as far as the New Zealand dollar is concerned is a soft landing, not a crash,” he said.