On average, tariffs are saving us cash

By Chris Daniels

Cutting tariffs means more money for the average person, or so the economists say.

The Prime Minister announced the results of a study of tariff reductions yesterday on the eve of the first Apec forum in Auckland.

The report by the Institute of Economic Research, commissioned by the Ministry of Foreign Affairs, looked at recent tariffs cuts on cars, shoes, clothes and household appliances.

Mrs Shipley said the study conclusively showed trade liberalisation meant more money in the pockets of consumers.

In 1998, the average person was about 4 per cent better off as a result of cutting tariffs, the report said.

Cars had dropped in price by 16 per cent. It also found cutting a tariff meant more savings for the rich than the poor, with the poorest gaining 3.5 per cent extra spending power, the rich 4.3 per cent.

Projecting the savings into the future, the report said that by 2010 the average consumer would have an extra $42 a week, an 8 per cent saving - entirely the result of tariff cuts.

Alliance leader Jim Anderton responded quickly to the report, saying the price reductions had come with "a horrendous human price tag."

The analysis did not take into account the effect cheap imported cars had in reducing the value of the family car, he said.

"The report is nothing more than electioneering designed to legitimise this Government's mad rush to destroy jobs through tariff cuts."