142 Cablegram from Australian High Commission in Wellington to Department of Foreign Affairs

Wellington, 5 February 1981

0.WL7432 CONFIDENTIAL

A-N.Z.-C.E.R.

At Tuesday's meeting of the Economic Committee of Cabinet, chaired by the P.M., Ministers discussed the draft Permanent Heads Report1 and side papers on export incentives, dairy products,2 government purchasing etc. Officials 'did not seek nor obtain any directions' from Ministers, the purpose of the exercise was to permit officials to obtain a better idea of Ministers' thinking on the issues.

  1. From our discussions with a number of officials the main points arising from the Committee meeting are as follows:
    1. Finance issues were not discussed.
    2. Ministers consider that the Report and other papers as they stand at present do not represent an acceptable package.
    3. State Government purchasing policies are still a major issue and it is view of Ministers that June Premiers' Meeting is too late for this to be considered. Ministers feel that if Governments are removing impediments to trade for private enterprise then Governments should also be able to agree on this matter. A cable outlining N.Z.'s views and seeking to bring forward discussions on this issue is to be sent to N.Z. High Commission today.
    4. Whiteware, dairy products, are regarded as two areas on which Australia should be prepared to compromise so that differences may be resolved, and an acceptable package developed.
    5. Category 'c'-Australian list regarded as exempting more products than N.Z.
    6. On export incentives, are still seen as a difficult area. Manufacturers have been assured that existing schemes will continue to 1985 and the idea of a review prior to then seems to be of concern to some manufactures who see a review as the removal of their economic survival.
    7. As to timing of meeting of Prime Ministers, because of Muldoon's commitments outside N.Z. from mid-April, every month after March would have implications for the deal N.Z. would have to seek. There is also the thought that officials may be asked to carry out a further study. In any event, the later the meeting the greater the political need for a 'win'.
  2. Most of the points A to E were reported by Nicolaidi in Wednesday's Evening Post, and we understand in the Canberra Times on 5 February.

[NAA: A1838, 37011/19/18, xxi]