30 September 2003

Pragmatic tariff decisions highlight benefit of successful coalition government

Progressive Party leader Jim Anderton says the coalition government's announcements today on post-2005 import tariff levels again shows the benefit of having a successful coalition government.

"Through the 1990s we had ideologically blinkered National-led governments which included United and NZ First, supported by ACT, that tried to remove all tariffs to zero, unilaterally, by 2006, with most being removed by July 2001.

"After the 1999 election, this pragmatic center-left coalition put in a six-year tariff freeze after over a decade of unilateral across-the-board tariff reductions. Those reductions took no account of the economic adjustment costs ? or the social costs to people and their communities that began in the late 1980s," he said.

At the time of the announcement of the six year tariff reduction moratorium, we signaled that future tariff reductions would be influenced by factors including the government's other economic and industry development policies and the need to achieve reciprocal benefits from trading partners.

"After significant negotiations between Labour and the Progressives, we have come up with a programme that both parties can not only live with but which we collectively believe is in the national interest at this time," Jim Anderton said.

"One key objective is to minimize adjustment pressures on firms and regions as they cope with the increasing globalization that is a permanent part of our world.

"The coalition government will be working closely with the textile, clothing, footwear and carpet industries, in particular, to ensure that existing industry and regional development policies are effective in helping these industries work through the adjustment process," Jim Anderton said.

"What we have announced are very gradual reductions of tariffs overall, with no Normal Tariff falling below 5 percent before 1 July, 2009.

"What we rejected was a unilateral move to zero tariffs by 2010. What we will have is a further review in 2006 to determine appropriate tariff rates after 1 July, 2009," he said.

ENDS

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