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GST and other reforms tilt playing feild in favour on NZ farmers



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BRUCE LLOYD

Media Release

c ^ O . .

Forfurther information: Parliament House, Telephone: 06/2774193

Canberra ACT 2600 Facsimile: 06/2772053

G ST AND OTHER REFORMS T IL T PLAYING F IE L D I N FAVOUR OF NZ FARMERS

New Zealand farmers believe the playing field is now tilted positively in their favour following the removal in New Zealand of input taxes, tariffs, subsidies and other forms of old-style farm policies. .

That was the opinion expressed by the NZ Farmers' Federation president, Owen Jennings, when speaking at the Victorian Farmers Federation Annual Conference in Melbourne this week.

National Party Deputy Leader and Shadow Minister for Primary Industry, Bruce Lloyd, was there when Mr Jennings encouraged Australian farmers to embrace these reforms, including the Federal Coalition's proposed Goods and Services Tax.

He said New Zealand had improved its terms of trade with

Australia by 25 per cent because NZ had reduced inputs costs, lowered income tax, promoted savings and growth and improved the general business environment.

"Despite initial reservations about the introduction of a new tax, Federated Farmers of NZ promoted the change from sales and income taxes to a consumption tax because it saw both macro and micro benefits for agriculture," Mr Jennings said.

"Although farmers have not been big taxpayers because of variable and often low incomes, the removal of a business cost and the transfer to a consumption tax assisted in the battle for

competitiveness and promoted savings."

Mr Jennings said the advantages of a GST were the zero-rating of exports and the removal of business costs with the GST being rebated to businesses. New Zealand farmers recognised the advantage this gave them over Australian farmers.

He said New Zealand was now the least protected country, with no tariffs, no subsidies and very little assistance.

"Rail reforms have resulted in a 90 per cent increase in

productivity on NZ Rail and costs have been reduced 509 per cent.

"Wharf costs have reduced about 50 per cent, meat killing costs are down 25 per cent and Local Government costs have been reduced by 30 per cent."

Mr Jennings told Mr Lloyd during the lunch break that dairy factories and canneries had also experienced a 25 per cent reduction in costs.

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He told the Victorian farmers that New Zealand farmers now had confidence in the future.

"We know we are competitive on a world basis," he said.

Mr Jennings said NZ inflation was down to one per cent and

farmers could now borrow money at less than 10 per cent.

On the down side, he said it took about three and a half hours every two months to fill out the GST form and this cost money.

However, he said NZ farmers had learnt that by organising their buying and selling they could actually obtain a positive cash flow to work with following the sale of goods and this helped offset costs.

He laughingly told his audience that perhaps he should not be spreading the good news because if Australia undertook reforms they would become a more competitive force against New Zealand.

However, he said the two countries should work more together in world markets.

end 60/92 17/6/92