Australians hear how reforms benefit NZ international trade
Published01 Oct 1995
The combination of competition and trade policy reform has put New Zealand in a strong position to take advantage of increasing international opportunities, particularly in fast growing South-East Asian markets, Australian economists are being told by Commerce Commission Chairman Dr Alan Bollard.
Dr Bollard was speaking at the 1995 Conference of Economists hosted by the South Australian Department of Treasury and Finance.
He discussed the major changes that have occurred in New Zealand since 1984, and focused on how competition law - the Commerce Act - and much lighter restrictions on international trade have benefited the economy today.
The short term impact of the reforms was a recession during which firms which could not adapt collapsed and unemployment increased. The medium term impact, seen over the last few years, has been strong economic growth.
The transformation from a highly regulated economy is now nearly complete and most sectors are fully deregulated.
The results being seen are that competition, locally and from imports, has encouraged firms to cut costs, lower prices and improve product quality.
Companies who saw limited room to expand in New Zealand focused on export markets and overseas investment.
Reducing the cost of imports has helped reduce the cost of many exports because the price of imported components has dropped. At the same time competition has increased among the suppliers of locally produced components and services.
In local markets, strong economic growth since mid-1992 has produced new entrants, even in sectors previously controlled by statutory monopolies.
How these now deregulated monopolies will affect the economy is the main issue still to be resolved. However, indications are that the Commerce Act, disclosure regulations, and the separation of natural monopoly elements of a business from its other activities are preventing dominant firms abusing their market power.
Media contact:Communications Officer, Vincent Cholewa