New Zealand: Fletcher Building, which holds a 94% share of the New Zealand wallboard market, may be hurt by a Budget decision to remove tariffs on imported wallboard and duties on other building products, according to analysts. Building products provide about 20% of Fletcher's earnings.
The government said that it hoped to reduce the cost of a standard new home by US$3500, by temporarily dropping duties on 90% of the building materials used. The cost of building materials in New Zealand is around 30% higher than in Australia.
The Building Industry Federation's chief executive Bruce Kohn doubted the Government's claim that the move would save new-home builders US$3500 and said that similar moves in Australia saw that market 'flooded' with low-quality building materials.
Finance Minister Bill English said that reducing the tariffs would build on the government's previous reforms to deliver more competition to the building materials industry. However, Labour leader David Cunliffe said, "Average prices in Auckland rose by US$6208 in April 2014. The Government's levy changes will save just two to three weeks of Auckland house-price inflation."
The Budget announced that anti-dumping tariffs on wallboard, reinforcing steel bar and wire nails would be immediately suspended for three years and tariffs on other materials such as roofing, cladding, insulation and paint would be dropped from 1 July 2014, to be reviewed in five years.
