224 Telegram from Adams-Schneider to Ministry of Foreign Affairs

Perth, 3 June 1981

No 128. IMMEDIATE

Government Purchasing Mission

I have now seen four State Premiers and am very much encouraged by the reception our proposal has so far been getting. The following is a summary of the reactions of each of the States we have so far visited:

Victoria

The Acting Premier (now the Premier designate) confirmed that there was no difficulty in principle in extending to New Zealand the same arrangement which Victoria has with South Australia. There would no doubt be some practical problems and perhaps some difficulties with some of Victoria's manufacturers but he expected that this could be worked through in detailed talks between officials.

Queensland

Again the Premier said he saw no difficulty in principle but said that the proposal would need to be looked at in detail by officials and then come up to Ministers in the usual way. It was left that Queensland officials would study the question more closely, trying to quantify the implications and the potential, and would then come back to us when they were ready to talk again. The Queensland Minister (Mr Hewitt) who has responsibility in this area was happy to go along: 'if it's good enough for Joh,1 it's good enough for me'.

New South Wales

Last week New South Wales officials and their responsible Minister were chilly. They emphasised the importance of preferences to New South Wales and did not believe that in-State preferences could be given to New Zealand short of a comprehensive abolition of preferences among the States. However when I saw Mr Wran yesterday he was much more open-minded. By implication he seemed to accept that the preferences against New Zealand should be treated as part of the CER negotiations and kept quite separate from the question of interstate preferences. He also accepted that the discussion was about in-State preferences and unlike his Minister did not rule this out or urge us to settle simply for most favoured State treatment.

Wran said he would take our proposal seriously but he would need to look at it from all angles and in particular to see whether it would raise any hackles among his own manufacturers. Specifically he said that he would:

  • talk to Canberra and check out the national position
  • put our proposal to the next meeting of the New South Wales Manufacturing Industries Advisory Council which would provide the best means of assessing local business and union attitudes.

He said that he understood the need to give us an answer as soon as possible after the Council meets.

Western Australia

The Premier began by saying that he could, without the need to consult his colleagues, say that New Zealand would never be given less favourable treatment than the other Australian States. He did not however see any obvious problems about going further and granting in-State preferences. He implied that he would like to do so to create the right atmosphere to attract more New Zealand bids for private sector business in the State. His real problem with preferences, he said, had nothing to do with New Zealand. It was the means of preventing 'dumping' by eastern state manufacturers. He said that he would look into the question, talk to his colleagues and to the Stores Board which comes under his portfolio. 'I think you will find that after I have talked to the Stores Board we should have no problem in working out something suitable.'

His Minister for Industrial Development suggested later that they would also want to consult with their local manufacturers-some sectors like electrical switchgear firms might be sensitive to NZ competition. The Premier did comment as an aside that he might have some difficulty with reactions from other States if he was to make public what he was prepared to do for New Zealand. I took it that he was signalling that his position would be easier if most of the other States were also prepared to give us domestic supplier status. The Minister commented that the August Industry Ministers' Conference was the best opportunity to get a collective response from the States and promised to give us Western Australia's answer before then.

In the light of the reactions we have had so far I am becoming more hopeful that our objective can be achieved, although clearly considerable work will be required at the next stage in nailing down firm commitments.

For Canberra. The High Commissioner may wish to brief Mr Anthony on progress so far.

[ABHS 950/Boxes1221-1226. 40/4/1 Part 37 Archives New Zealand/Te Whare Tohu Tuhituhinga 0 Aotearoa, Head Office, Wellington]