Improvements to Govt's export credit scheme

Changes to the Government’s Export Credit Office (ECO) scheme will help New Zealand exporters win orders, says Associate Minister of Foreign Affairs and Trade Pete Hodgson.

A review after the ECO's first year in operation has resulted in changes to the scheme and plans for a more comprehensive information campaign. Information on the scheme will be provided by workshops held in conjunction with Trade New Zealand and Industry New Zealand. The ECO will work closely with Export New Zealand to provide exporters with timely information about its products.

“Following further research and consultation with the export sector the scheme is being adjusted to give greater flexibility,” Mr Hodgson said. "There will be a higher maximum level of Crown cover available, and some of the transaction costs for exporters have been removed.

"While the ECO is shelving its short-term reinsurance product until such a time where it can meet its costs, officials are examining other short term products and will report to Cabinet by the end of the year."

The ECO was set up to provide credit insurance for exporters for new orders, or cover in high-risk markets where private sector banks and insurers did not provide insurance. During 2001-02 the ECO received inquiries regarding support for 18 transactions supporting $550 million worth of exports. By the end of the financial year none of these transactions had resulted in a guarantee, although some negotiations are still in progress.

Mr Hodgson said that while the changes announced today would expand the ECO’s pool of potential transactions, the scheme would only ever deal with a limited number of companies. This is due to the relatively small size of New Zealand exporters and export transactions, and the size of the capital goods and service market in New Zealand.

"The information campaign is particularly important, as the ECO provides new business opportunities to exporters. We need to make sure exporters are aware of what it has to offer."

© Scoop Media