Vast Aust, market opens to N.Z. firms

Press, 25 February 1989, Page 10

Vast Aust, market opens to N.Z. firms

NZPA Sydney Australia yesterday agreed to put New Zealand and Australian companies on an equal footing when bidding for state government contracts, opening up to New Zealand competition a market valued up to sAustl2 billion ($15.75 billion) a year. Federal and state industry Ministers at the Australian Industry and Technology Council meeting in Adelaide, agreed to incorporate New Zealand into their National Preference Agreement (N.P.A.). The move is seen as a big breakthrough for closer economic relations between the two countries. The Minister of Commerce, Mr Butcher, who also attended yesterday’s meeting, told N.Z.P.A. the agreement marked a “very useful cementing in” of C.E.R. because it was entirely consistent with what already had been achieved through the treaty. Preference margins of between 10 per cent and 15 per cent apply against New Zealand companies bidding for Australian state government contracts — meaning New Zealanders have to offer up to 15 per cent more than Australian companies to compete for a contract. < As from June 1 this year, New Zealand will be on the same footing. New Zealand companies have been given equal treatment when

competing in the Federal Government purchasing market, estimated to be valued between sAustB billion ($10.5 billion) and sAustlo billion ($13.1 billion) a year, since 1983 when C.E.R. came into force. It has taken the states six years to follow suit, because of protracted negotiations. The Australian Trade Minister, Mr Duffy, said in Wellington last year the states were “like donkeys,” having to be coaxed and not pushed on the preference issue. Mr Butcher said he did not have to argue the New Zealand case at yesterday’s meeting, as the parties had consented beforehand to New Zealand joining the preference agreement. No objections were raised against New Zealand’s entry, but Mr Butcher said some states pointed out that New Zealand companies could be in a better position than Australian companies when competing against third countries in each other’s markets. “Australian firms have third country protection in their own market and New Zealand firms would gain the advantage of that third country protection. Australian firms won’t have the advantage of third country protection when competing in New Zealand, with the exception of New Zealand’s external tariffs,” Mr Butcher said. “This is because we

don’t have a (Government purchasing) preference policy.” Mr Butcher said the New Zealand Government had opted to move away from preferences because the economic benefit would be marginal and they had costs attached. Yesterday’s decision will give New Zealand goods free access to the three big markets in Australia: the private sector market where all tariffs and quotas will be removed by July 1 next year; the Federal Government purchasing market; and the state government purchasing market estimated to be valued between sAustB billion ($10.5 billion) and sAustl2 billion ($15.75 billion) a year. Trade officials pointed out that New Zealand companies have taken advantage of the Federal preference agreement since 1983. They cited New Zealand forestry companies selling vast amounts of paper to Telecom Australia for telephone directories and AHI manufacturing plastic butts for the Steyr automatic rifles being supplied to the Australian and New Zealand armies. Moves to make standards within Australia more uniform (standards and labelling requirements vary from state to state) were also discussed at the meeting and New Zealand asked to be involved in Australia’s work in this area.