A cut in tariffs is a setback for New Zealand''s fashion sector, according to an industry group. The Government has confirmed that a freeze on clothing, footwear and textile tariffs will end in July 2006. Fashion Industry New Zealand said the move would hurt a manufacturing infrastructure that already hung in the balance.

Hart Manufacturing director and FINZ board member Walter Hart said that after previous tariff reductions, which had caused a flood of imports, manufacturing had deteriorated. "Many factories, fabric wholesalers and suppliers have since closed or reduced supply to a minimum," he said. "This is making it much more difficult for us to manufacture in New Zealand, and lowering tariffs further will certainly compound these problems."

FINZ board member and Global Textiles managing director Peter Meadowcroft said: "I''ve seen wonderful growth in my clients through exporting which, in turn, has seen my own company grow to supply their needs. "The reduction of tariffs will have a devastating effect on this growth and the fashion industry''s long-term future." FINZ executive officer Donna Whittle said that the difference in wages between producing garments in countries with low labour costs and New Zealand  $1.50 an hour vs $10 an hour  coupled with a competitive retail environment put local fashion at a disadvantage.

The appreciating Kiwi dollar was making things worse by putting additional pressure on the industry, she said. Mr Hart said his firm had survived by producing higher quality garments to supply specialty stores which charged a premium. However, he warned that tariff reductions would cut margins between imported and locally made goods to the point where domestic firms could no longer compete.