NZ could be tariff-free

Could New Zealand soon be tariff-free?

Commerce Minister Andrew Bayly will soon get advice on dropping New Zealand’s few remaining tariffs, allowing vastly more goods to enter the country without paying a fee.

A Briefing to the Incoming Minister of Commerce (BIM) hinted the Government was receiving advice on dropping remaining tariffs, which was an Act Party election policy. Bayly’s office confirmed in a statement that the minister was getting advice in the near future.

Most of New Zealand’s trade is covered by fair trade agreements, which means countries whose imports are covered under those agreements pay low or no tariffs. . . 

Bayly’s BIM made the consumer case for dumping tariffs.

“New Zealand retains five and sometimes ten per cent tariffs on imported goods. Although free trade agreements greatly reduce these, consumers can still face higher prices because of tariffs that apply to goods such as cosmetics (including sunscreen, make-up, perfume, and skin care), motorhomes and caravans, frozen pork, t-shirts and sweatshirts, leather shoes and jewellery,” the BIM said.

These tariffs earned the Government $180 million last year, meaning that getting rid of them would cost the Government roughly that amount of money.

However, the BIM said the cost to the total economy was greater than what the Government earned in revenue.

“Costs include the administrative costs for government in maintaining the system and compliance costs for businesses in demonstrating that their imported goods come from a country that qualifies for lower tariffs under a Free Trade Agreement. A recent study estimated these add another $90-260 million in costs to consumers, businesses, and government,” the BIM said. . . 

Tariffs contribute to inflation. Dumping them would make a contribution to cutting costs:

Responding to calls for the Government to scrap New Zealand’s remaining import tariffs, Taxpayers’ Union Policy & Public Affairs Manager, James Ross, said:

“Tariffs are a tax on consumers, and if there’s one thing Kiwis don’t need during this cost-of-living crisis it’s the Government increasing the price of goods even further.

“As well as driving up prices and the costs of doing business in New Zealand, our tariffs quite literally cost the Government more to administer than they raise in revenue. They are a millstone around our country’s neck stifling competition and holding back growth.

“The folly of import tariffs is clear, and cash-strapped shoppers should be jumping with joy at any attempts to follow Singapore’s example in becoming a free trading nation.”

Dumping the tariffs would be good business and also a good example to other countries.

New Zealand is a strong advocate for free trade and should dump tariffs to demonstrate our commitment to that.