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War Economy

Increased Imports

Increased Imports

Many New Zealanders looked forward to an end to import controls after the war. A resolution passed at the annual conference of the Associated Chambers of Commerce in 1944 said: ‘That this Conference is emphatically of the opinion that import control and selection as at present practised is unnecessary, restrictive to trade, and as such is undesirable. It therefore urges immediate revision, and abandonment at the earliest possible moment.’ This attitude was supported by many consumers, who found their freedom of choice restricted, and by farmers, in whose view import controls, by protecting inefficient local industries, raised costs.

Leathem summed up the Labour attitude to import controls, as it was expressed by Mr Nash in 1944:2

‘The Minister of Finance, the Hon. Walter Nash, in the budget debate in the House of Representatives on September 7, 1944, declared that the Government would continue its policy of import control to the full “as long as it was in the interests of the people of the country.” The Government's view was that import control would lead to a maximum of trade but abandonment of control would bring about the complete disintegration of manufacturing. It would impede rehabilitation and result in want, for imports would consist of the goods which were most profitable rather than those which were most needed. The Government would maintain the operation of the import policy as long as the Labour Party was on the Treasury benches. Later in the debate Mr Nash stated that he had told the Bretton Woods Conference that New Zealand would not give up import control but the Government might consider keeping money available for other approved transactions.’

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One part of the statement by Mr Nash is worth careful assessment. He said:1

‘… We are of the opinion that the carrying-out of a policy of import control and exchange control will lead to the maximum of trade.’

Certainly import controls, since the war, have not stopped New Zealand from importing more than her export earnings could pay for; and in recent years she has been trying hard to enlarge these earnings, so as to be able to import still more.2

Though the scope and intensity of import controls have varied greatly since their inception in 1938, they have never been completely removed.

Labour stayed in power until December 1949, and kept a very wide range of items under licence. However, import arrivals were allowed to rise considerably from their depressed wartime level. They increased by one-sixth in 1946, but in each of the years 1947, 1948, and 1949 they were 80 per cent in volume above the low level of importing in 1945. This brought the post-war volume of importing to 14 per cent above the average of 1937, 1938, and 1939.3

2 Samuel Leathem, ‘Industry and Industrial Policy’, published in New Zealand, edited by Horace Belshaw, pp. 179–80.

1 NZPD, Vol. 266, p. 183, 7 September 1944.

2 This of course ignores possible effects of import controls on industrial efficiency and hence on ability to produce most effectively for export or in substitution for imports.

3 As a long-term trend, volume of imports has increased by 3 per cent a year (based on 1928–29 to 1960–61).