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Federated Farmers Stands By Tariff Data

Federated Farmers is standing by its figure of household savings of $1000 per year if tariffs were completely removed.

Vice President Tom Lambie said that the figure had been dismissed by some politicians, but the figure was accurate, as it is based on a 1999 Ministry of Foreign Affairs and Trade commissioned report.

"The federation has publicly stated that the average household would save $1000 per year if all tariffs were completely removed. Federated Farmers stands by that, and notes that any meaningful policy debate requires accurate information."

"What is not widely known is that New Zealand is about average in the OECD in its average tariff level. New Zealand is no longer at the cutting edge; the rest of the world has caught up with New Zealand in reducing tariffs."

"Other nations are lowering their costs while New Zealand is raising its costs to defend inefficient industries that cannot compete in the domestic and international market."

"The cost of freezing tariffs until 2006 is based on a 1999 MFAT commissioned report, which identifies the cost of tariff protection to the New Zealand consumer."

"This report concludes that the average household has already saved around $1,140 per year because of previous tariff reductions. Moreover, the report concludes that the average household would save around a total of $2,180 per annum if tariffs were removed entirely."

"The cost of this policy to the average household will, therefore, increase to around $1,040 by 2006," Mr Lambie concluded.

The cost to consumers is a better measure of tariffs impact than simply measuring government revenue gathered, because consumers cost includes the fact that tariffs increase the price of all domestically-sold goods, whether or not they have been imported.

All New Zealanders, whether low wage earners or not, pay for the cost of tariffs through a reduction in purchasing power. A large proportion of low wage, unskilled workers are actually being taxed by tariffs, rather than benefiting in some indirect way from them.


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