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Current as of 25/05/17 04:00PM NZST
Property editor of the NZ Herald

Budget 2014: Building firms fume over axing of duties on imported materials

Photo / Paul Estcourt
Photo / Paul Estcourt

Building businesses have hit back at the Government's Budget for its shock axing of anti-dumping duties on imported building materials, indicating jobs and companies could be lost if masses of cheap overseas construction materials flood our borders.

Bruce Kohn, Building Industry Federation chief executive, claimed the Budget move "casts some doubt on the willingness of the Government to protect New Zealand businesses against the actions of predatory international suppliers prepared to export to third countries at prices lower than their domestic cost of production. Such action does not recognise the vulnerability of domestic manufacturers to opportunistic overseas suppliers."

The federation, formed in 2001, lobbies for the interests of major industry participants including merchants, importers, distributors, manufacturers wholesalers, marketers and related service providers.

Kohn claimed the building market would now be a "free for all outlet for global suppliers" and said his organisation hoped the Government would take into account the potential impact of allegedly dumped products on employment and sound operations of Kiwi companies.

Meanwhile, New Zealand's biggest listed company, Fletcher Building, is shying away from discussing the change.

Shortly after the Budget was released at 2pm today, spokesman Rick Osborne said the company would consider the matter before a statement was made later today.

But Philip King, investor relations manager, said later no statement would be released.

Instead, he said a statement would come from the federation.

Kohn said competition existed at every point in the manufacture and distribution chain and the measures taken will add to competitive pressures on current domestic and overseas suppliers of products to both the residential and commercial markets.

Institutional investors predicted trouble for Fletcher from the axing, saying their market dominance was being challenged and the company might be forced to push down its prices.

PwC Partner Chris Leatham said the axing was good for the building sector as a whole and should be welcomed. Any measures which helped bring down the cost of building were good for New Zealand, he said.

Fletcher shares are today trading around $9.20 although they have been as high as $9.86 in the last few weeks.

- NZ Herald

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