In the budget last week the Government announced that it would temporarily remove duties on imported building products to assist reducing the costs of building. It is estimated that this will reduce the cost of building a new house by $3,500.
This has generated a reasonably positive response particularly from builders in the residential sector.
The purpose of these duties is to prevent international suppliers dumping products into a market to remove competition and establish a long term market position. There has already been some articles speculating about the effect this may have on companies such as Fletcher Building, which is a significant domestic building products supplier.
It is possible that removing the duties will lead to some major international corporations reducing prices to the detriment of domestic companies to gain an advantage in the long term. The government has attempted to minimise the threat of this dumping behaviour by stating this is a temporary measure.
We will monitor the effect of this policy and keep you informed.