Government says that cutting import levies will see $6.3 million flow back into businesses to “reinvest” in the economy.
Lower prices, better business, higher wages, more economic activity – a “win-win” situation for “everyone” promises the deputy prime minister.
We’re not so sure.
Finance officials have been less than transparent about the reasons for the import levy cuts.
Or the sneaky way they’ve introduced these cuts, possibly breaking their own finance laws.
Late last month, the Ministry of Finance and Economic Management called on public submissions about the cuts for a process they admit is already “underway.”
We wrote an 11 page submission, outlining the ways their approach to this controversial subject was wrong. Including giving just two weeks for public input into policies they say have been around for a whole decade.
Their so-called “import levy reforms” are tied in with ongoing world trade talks, the kind that prompt riots in the streets that end up on the TV news.
Why the riots?
Smaller countries, including developing nations like ours, are being pushed into accepting trade agreements that lower levies and other “trade barriers.”
Bigger, much richer, countries however continue to protect their own economy because their business leaders are better organised than ours. Politicians in big countries depend on support from big business to convince enough voters to keep them in power. In return, they protect big business from competition by exporters in small countries.
Like ours. Other concerns include the fact that bigger countries can produce goods much cheaper than our small country can. They can flood the market with cheap imports and kill local business.
And kill us. Our full submission to MFEM, the Ministry of Economic Management, reports warnings from overseas studies including by the United Nation’s Food and Agricultural Organisation, that lowering levies lead to cheap food imports.
People buy cheap imported, low-grade chicken, for example, packed with antibiotics and steroids, instead of fresh, healthy but comparatively expensive local fish.
Already high rates of heart and other lifestyle diseases climb even higher, local levels of business participation and wealth sharing fall even lower.
For fatter. And poorer.
Why then is government agreeing to cut import levies, in line with regional trade agreements?
Simple. Our politicians agree to these kinds of agreements so that the aid taps are kept turned on.
And, like their colleagues in big countries, so that enough voters keep putting them in power.
Import levy cuts: no or low levies
Import levy cuts: how much will we lose?
Import levy cuts: process gaps
Import levy cuts: will it work?
Import levy cuts: governance gaps
Import levy cuts: short term suggestions
Import levy cuts: long term suggestions
Import levy cuts: conclusion
Import levy cuts: whole submission