Adopting the recommendations of the Shipping Industry Review released today would be negative to New Zealand's economy, National's Industrial Relations spokesperson Lockwood Smith said. "The review was an election sop to the Seafarers' Union, concerned that 'blue water' ships were providing too much competition to New Zealand companies, by the Labour-Alliance coalition.

"Submissions to the review identified huge savings of up to 50% in coastal shipping costs since the New Zealand coast was opened to international competition.

"New Zealand needs to continue to encourage competition because this reduces the cost of goods and puts our businesses on a level with international markets.

"All New Zealand goods have a freight component within their cost. Interfering with the coastal shipping industry could increase those costs and making our products less competitive internationally.

"It is most important that our cost structure remains on an equal footing with world markets.

"The Government shouldn't adopt the recommendations of the review team's report or closet the shipping industry.

"However the report would've been more damaging if the review recommended changes to cabotage.

"The review team's recommendations reflect the vested interests of a number of members on the team. It will be interesting to see whether the Government is prepared to put the interests of the New Zealand economy ahead of its friends in the Seafarers' Union," Dr Smith said.

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