Caygill against industry protection

Press, 3 June 1989, Page 2

Caygill against industry protection

Protection for industry was the wrong way for a Labour Government to fulfil its traditional “protectors of the workers” role, the Minister of Finance, Mr Caygill, said yesterday.

“The issue of industry protection is one that has bedevilled Labour Governments all round the world,” he said in Christchurch. “As protectors of the workers, Labour administrations have often been push-overs for those companies which have sought to use the threat of layoffs or closure when faced with a whiff of competition. “We’ve traditionally held out against opening the doors to competition — for fear of, what it would do to the workforce. “Experience in the last few years has taught us how misguided we were,” he said. “Letting our hearts rule our minds worked in the end to the detriment of everyone in employment.” Special protection for industry had placed extra costs on all New Zealanders and closed producers’ ears to the needs

of their markets. Admitting that he had not always agreed with the policies the Government was now implementing to bring levels of protection down, Mr Caygill said he had underestimated businesses’ ability to survive. In addition, New Zealand was still a long way from having free trade. “We still have the highest levels of protection in the 0.E.C.D.” Mr Caygill said failure to move against high levels of industry assistance in Australia was now costing their economy. He disagreed with critics who said too few jobs would be created by New Zealand’s agricultural production. “We do have a real competitive advantage in the conversion of grass into grain and fibre, and certainly farming may no longer be labour intensive,” he said. “But it is the downstream job creation that is important.”