Export credit scheme assured

By DANIEL RIORDAN

Prime Minister Helen Clark has told exporters they will soon have what their competitors in the rest of the developed world enjoy: a Government-backed export credit and guarantee scheme.

Her signal puts an end to fears that the scheme, promised by the Labour Party while in opposition, would go the way of R&D tax breaks and fall off the policy agenda.

Helen Clark said she was convinced from recent discussions with overseas officials and local exporters on trade trips to Chile and Turkey that a scheme was needed.

Speaking at yesterday's launch of an internet portal of the privately funded NZ Trade Centre in Auckland, she said exporters were losing hundreds of millions of dollars a year without a scheme.

"Not only do I have all the stories from exporters at home of all the opportunities being missed, but some of the travelling I've done this year suggests we're losing business because we do not have Government support for small and medium-sized exporters the way our competitor Western countries do."

She said she was unhappy with the lack of progress made by Trade NZ, the Government agency that has been consulting business on the issue.

Asked why it was taking officials so long to come up with a scheme, she said the Government was more proactive on business than its predecessor, but perhaps it was taking time for that message to filter through to officials.

"I know Trade NZ tried in the early 1990s to get the last Government to do something and was turned back. Maybe its spirit was crushed.

"I would like to see policy decisions made within the next three months. It has to happen, and I'm not going to take no for an answer."

Export credit insurance, already provided by several private sector insurers, allows firms to cover the risk of sending their products overseas. Policies cover a percentage of the losses resulting from the buyer overseas going broke, failing to pay or refusing to accept goods. The cost of the insurance is typically 50c for every $100 of the landed value of the exported goods.

The insurance also allows firms to "discount" - take a bank loan against the value of an export consignment while it is in transit. That allows small firms with one large export order to pay salaries and keep afloat until the bill is paid.