Hon John Luxton
Minister of Food, Fibre, Biosecurity and Border Control
TARIFF REMOVAL BY 2006 BENEFITS FAMILIES AND BUSINESSES
The National minority Government will continue to phase out tariffs on all remaining goods by 2006 the Acting Minister for Enterprise and Commerce Hon John Luxton announced today.
The tariff reduction is one of the Government's Policies for Progress which were announced today by Prime Minister Jenny Shipley.
"Lowering tariffs benefits New Zealand families and businesses through lower prices and wider consumer choice; lower costs throughout the economy; lower inflation; lower input costs for export industries; improved productivity and encourages us to concentrate on the areas we are more competitive.
"Today's announcement will help reduce costs and continue to help employers to create new and better paid long term jobs for New Zealanders. This is borne out in the statistics - since initial tariff reductions and the opening up of our markets over 168,000 additional jobs have been created in New Zealand industries.
"Currently over 95% of goods come into New Zealand tariff free. The phase-out of remaining tariff categories by 2006 will mean New Zealand manufacturers can now plan their business futures with certainty and confidence.
"While the speed of this reduction is slower than some may have expected, the Government rejected the suggestion of removing all tariffs immediately in 2000. We have chosen a pathway that balances fairness to industry, workers and consumers. We are still four years ahead of the zero tariff goal by 2010 that New Zealand is committed to as part of APEC. Tariffs will continue to reduce each year bar one between now and complete removal in 2006.
This commitment will help maintain momentum towards open trade and investment within the APEC community. This is important for New Zealand which is a major exporting country and is hosting APEC next year."
APEC is already working on some early sectoral liberalisation initiatives that will be very important to some major New Zealand industry sectors. "We must show leadership if we want others to move ahead on the process of reducing trade barriers."
"We are continuing the phase out of tariffs which first began under the Labour Government in 1986. By 2006 New Zealand firms would have had 20 years to adjust since tariffs were first reduced. This plan has the support of the New Zealand Manufacturers Federation and the Textile & Apparel manufacturers. It also takes into account the concerns of some independent Members of Parliament relating to the textiles footwear and apparel industries.
Mr Luxton stressed that the most successful and prosperous economies are those that have outward looking economic and trade policies.
"Exports offer New Zealand the best route to growth and job creation. However we must continue to improve our international competitiveness if we are to grow and prosper. The removal of tariffs, along with the removal of the prohibition of parallel importing in the last Budget will help considerably with this," Mr Luxton concluded.
ENDS
Inquiries: Conor English (04) 4719-707 (04) 4757-203 hm
TARIFF REMOVAL: INDICATIVE CHART
| Goods | 1 July 2000 | 1 July 2001 | 1 July 2002 | 1 July 2003 | 1 July 2004 | 1 July 2005 | 1 July 2006 |
| (a) Textiles, clothing and accessories, carpets, headgear, footwear | 15% 10% 5% |
15% 10% 5% |
15% 10% 5% |
15% 10% 5% |
10% 8% Free |
5% 4% |
Free Free |
| All other products | 10% 5% |
5% Free |
Free |
- From 1 July 2006, no tariff duty will be payable at all on any goods imported.
- The rates detailed above are termed "ad valorem" (duties which are calculated on the basis of value). The phase out programme uses ad valorem rates as its basis.
- "Specific duties" - which are fixed dollar amounts per item, weight or other measure - will be removed in phase with ad valorem rates.
- Nothing in the new legislation prevents the reduction or removal of any duty or rate of duty at a time earlier than (as the case may be) 2001, 2002, 2004 or 2006, and existing tariff policies relating to removal of tariffs from goods not made in New Zealand, reducing costs (eg through Part II tariff concessions) and tariff simplification will continue.
Government will also be looking further at ways of reducing compliance costs for goods entering New Zealand. The removal of tariffs should facilitate this and work will continue on reducing costs in the interim.
- Motor Vehicle Industry
Tariffs on passenger cars and vans were removed in the 1998 Budget.