Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Loss of NZ ship a Government ‘own-goal’

Media Release

26 November 2003

Loss of NZ ship a Government ‘own-goal’

The New Zealand Shipping Federation today said that the withdrawal of another New Zealand ship from coastal trade was a sad point of proof that the industry was in decline because of Government inaction.

The Federation’s Manager, Paul Nicholas, said the Government still had not yet acted on a Shipping Industry Review in 2000 which recommended a range of actions designed to rejuvenate the industry.

“The loss of another local ship is an own-goal for the Government.

“Foreign ships are dumping capacity on the local market, forcing prices down below the real cost.

“Dumped capacity, which doesn’t need to worry about scheduled services and local compliance costs, sets the market rate. At those rates, there is no profit in the business for local shipping operators.

“The only routes which are profitable for local operators are on the Cook Strait – which is the only place where everyone competes on an effectively level playing field. However, even on the Cook Strait routes non time sensitive cargo is lost to “transit ships” which puts the fixed costs onto the time sensitive cargoes.

“We believe that once local operators are forced out of business, foreign operators will move in and put prices back up again – just as happened on the Tasman routes,” Mr Nicholas said.

Mr Nicholas warned manufacturers and farmers who have benefited from the government subsidy on foreign ‘transit’ ships, to watch for a repeat of the Tasman experience.

“There are no longer any NZ ships on the Tasman route - and rates are gradually increasing. We predict the same will occur on the NZ coast.

“The base freight rates might currently appear low but we warn users to watch the addition and increase of other charges.

He was incredulous at the failure of the Government to take action.

“It is hard to believe that our own government is willing to let this happen.

“Bizarrely, the Government can’t even find its way to eradicating the ridiculous situation in which local shipping operators have to get permission for their ships to travel between ports.

“The only action from our legislators to date has been to increase the costs of operations for NZ companies, which has just increased the cost differences. When it comes to paying wages, taxes and other compliance costs, Government rhetoric turns out to be of no use at all.

“The solution is clear: match the rest of the world by allowing local operators to move ships between any ports, and restrict foreign shipping operators to exports and imports,” Mr Nicholas said.

He said the industry was in talks with the Government aiming to achieve this solution, but progress was frustratingly slow.

ENDS


© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Stats NZ: Consents For New Homes At All-Time High

A record 41,028 new homes have been consented in the year ended March 2021, Stats NZ said today. The previous record for the annual number of new homes consented was 40,025 in the year ended February 1974. “Within 10 years the number of new homes ... More>>

Stats NZ: Unemployment Declines As Underutilisation Rises

The seasonally adjusted unemployment rate decreased to 4.7 percent in the March 2021 quarter, continuing to fall from its recent peak of 5.2 percent in the September 2020 quarter but remaining high compared with recent years, Stats NZ said today. ... More>>

ALSO:

Digitl: The Story Behind Vodafone’s FibreX Court Ruling

Vodafone’s FibreX service was in the news this week. What is the story behind the Fair Trading Act court case? More>>

Reserve Bank: Concerned About New Zealand's Rising House Prices

New Zealand house prices have risen significantly in the past 12 months. This has raised concerns at the Reserve Bank of New Zealand – Te Putea Matua about the risk this poses to financial stability. Central banks responded swiftly to the global ... More>>

Westpac: Announces Strong Financial Result

Westpac New Zealand (Westpac NZ) [i] says a strong half-year financial result has been driven by better than expected economic conditions. Chief Executive David McLean said while the global COVID-19 pandemic was far from over, the financial effect on ... More>>

MYOB: SME Confidence In Economic Performance Still Cautious

New insights from the annual MYOB Business Monitor have shown the SME sector is still cautious about the potential for further economic recovery, with two-in-five (41%) expecting the New Zealand economy to decline this year. The latest research ... More>>