Alliance Cancels Tariff Reductions. Labour rolled.
Tariffs of 19% on clothing and shoes were scheduled to reduce in July to 15%. Mr Anderton has now cancelled that reduction.
The Minister of Economic Development's decision was made in response to a request from an association of clothing manufacturers.
This decision breaks Labour's pre-election promise to freeze tariffs at year 2000 levels. They will now be frozen at 1999 levels, for as long as this government remains in office.
In December 1999, the Minister of Finance Mr Cullen confirmed publicly that the year 2000 reductions would go ahead as scheduled. We reported Mr Cullen's statement to our members in Import News of 7 December.
Importers relied on Mr Cullen and sold their goods based on a 15% tariff. They have now learned that it is not wise to rely on this Minister of Finance. Many importers will not be able to recover the difference and will have no option but to carry the loss. Consumers, as usual, will also end up paying.
There is not a single job that will be created or protected by continuing to make consumers pay high tariffs on clothing and shoes. That is because low quality shoes and clothes are no longer made in New Zealand in significant numbers.
Mr Anderton would need to at least double the current tariff, to bring back those industries and return us to the days when New Zealanders had to pay high prices for low quality merchandise, or shop in Sydney.
The Importers Institute calls this decision yet another attack by government on business, based on no more than ideology.