New Zealand is being flooded with cheap imports. How can we compete?
Currently it is very difficult to compete with countries that pay extremely low wage rates and maintain poor environmental standards.
The exchange rate is also a problem as the rate is influenced by huge movements of money for speculative reasons rather than a true reflection of real trade between nations.
We will charge a variable surcharge on all uptake of foreign currency. Speculative movements of money will be discouraged. The surcharge will significantly reduce any margins made.
This surcharge will be known as the Foreign Transfer Surcharge.
Money collected from this mechanism will be used to reduce internal taxation and a proportion used to progressively pay back our overseas debt.
FTS automatically prevents the country from being swamped by overseas goods and services since the surcharge will rise to compensate any future drift to imbalance in the current account.
Bluntly, we can't compete against low wages and poor working conditions in some countries, but we can prevent excessive transfers of funds to those countries by charging a fee for any currency exchange. This would reduce their cost advantage. It would also discourage speculation in our currency and give greater stability in that field.
Why should we compete? We do many things so well that others can not compete with us in those areas. But if there is a real problem our proposal to make a charge on overseas exchange will help to balance it out.