Taxpayers' Union says Government should 'follow Australia's lead' in abolishing tariffs

There are calls for the Government to follow Australia's lead in abolishing almost 500 import tariffs to make life easier for businesses.  

If the move went ahead, some of the items which could become cheaper for Kiwis include sunscreen, makeup and school uniforms.    

New Zealand Taxpayers' Union campaigns manager Connor Molloy stressed the consequences on the economy if the Government decides not to follow suit with Australia. 

Speaking with AM on Wednesday, Molloy described tariffs as "just another tax".  

"This time it's a tax on imports. What this does is it raises prices for consumers," he said.   

Although there are "relatively less" tariffs than there were around 30 years ago, Molloy said it "doesn't mean they are insignificant".  

"All of these things drive up costs and slow down the economy," he said. "We think absolutely these tariffs are something that should be abolished, we should follow Australia's lead."   

He said he is yet to reach out to ministers to prompt action. 

"I understand the Minister of Commerce Andrew Bayly is seeking advice on this but it definitely is something that we will be considering sending a letter to the [Trade] Minister to encourage them to do this."   

When asked what significant tariffs spring to mind, Molloy said ambulances can be slapped with a levy of about 10 percent depending on what country it is being imported from. 

"But there's more basic products as well, like sunscreen and makeup, even school uniforms that the tariffs can put the price up on that," he explained.  

He said if countries decide not to import to New Zealand, due to the tariff not making it worthwhile, then domestic producers from countries Aotearoa has free trade with could "charge slightly higher prices because there is one less competitor there".  

Molloy agreed abolishing tariffs might not be of interest to the Government, due to the money it gets from revenue. 

However, he said the Government should look elsewhere for "some spare change".  

Also speaking with AM on Wednesday, former Trade Minister Tim Groser said Australia's reform is "not a big deal" in the New Zealand context.  

He believes New Zealand following suit wouldn't see much of an improvement.  

"In the New Zealand context, the reality is this is very much a line-call. It is not a big deal because tariffs in this country have reduced to the point where one recent study put the average NZ tariff rate as 0.24 percent," Groser explained.  

"This was a big issue 25 years ago but we have made so much progress in reducing both the barriers in our exports and also reducing the costs of imports to New Zealand businesses and companies that this is now a very small issue.  

"There are tariffs around five to 10 percent on things like textiles and other manufactured products, and that will be annoying to countries wanting to export to us." 

Groser said it's a tough decision the Government would have to make "in terms of logic".  

"It'll make very little difference and it wouldn't make much difference to our position," he said. 

"There is no great prize out there to lower living costs, this is a very small deal compared with the past. 

"It's all different now because of the progress we have made."