ECONOMIC EXPANSION TO ABSORB POPULATION RISE

Press, Volume XCV, Issue 28179, 18 January 1957, Page 14

ECONOMIC EXPANSION TO ABSORB POPULATION RISE

"Assuming a yearly net immi-l gration rate of 10.000. the tion of New Zealand is likely to ri-e at a cumulative rate of 1? per cent, a year and will reach 3.100.000 by 1975.” said Dr. W. B. Sutch. assistant secretary. Department of Industries and Commerce, in Dunedin yesterday. He was sneaking to a meeting of the Australian and New Zealand Association for the Advancement of : Science on “The next two de- < cades of manufacturing in New : Zealand.” “There will be a rise in the under 15 and the 15 to 65 age groups while the proportion of persons 65 and over will decline.” he said. “The labour force is likely to Increase by 45 per cent, and will reach 1.160.000 in 1975. The rate , of increase is at least the same as for the population, but may i be even higher because of the ■ effect of the high birth rate of , the immediate post-war years. ( “I have assumed that those en- . gaged in primary industry will < rise from 150.000 to 180.000 and that if service industries absorb ( about one half of the additional , labour force of 360.000. those en- ' gaged in services will increase = from 362.000 (in April 1955) to ; about 542.000 in 1975. “Allowing for increases in the ■ labour force in power, water and . sanitary services and the build- , ing and construction industry. • this would leave 125.000 to be absorbed by manufacturing industries.” he said. Labour Force Increases “Such an increase in the manufacturing force would mean a rise of 62$ per cent, of the present force of 200.000 which would be 24 per cent, cumulative a year. This means increasing the average annual additions to the labour force engaged in ' manufacturing to 6250 a year for the next two decades.” said Dr. Sutch. “The development in farming should expand certain sections of manufacturing and in- ' creased farming income should ' result in sustaining a section of the demand for the consumer goods produced by the manufac- 1 turing industries. “As a whole, the demand of the farmer, both as producer and 1 consumer, will not be sufficient to provide sufficient expansion of : manufacturing industries to ab- 1 sorb all the increasing labour ; force. “Agricultural production has to i increase at the annual cumulative i rate of 2 per cent, to provide for t the rising population at higher 1 standards of living and at the J same time to earn the necessary i overseas funds to import the re- i quirements of finished goods, pro- ( ducers’ materials and equipment for a rising population and de- < veloping industries,” said Dr. 1 Sutch. i “Although such a rise is phy- z sically possible, it needs a con- j centrated effort by all those re- i

| sponsible. It also means a greater concentration on exports which in the last eight years have been rising at the cumulative rate of 1.8 per cent, a year only. “Manufacturing expansion will be in industries processing imported raw materials rather than in industries processing domestic raw materials. “Gross investments in surveyed manufacturing industries will rise during the period from about £2O million a year tn about £6O million a year. This amounts to nearly £BOO million over the 20 years. Total fixed assets in surveyed industries will be about £450 million in 1975. compared with £138.6 million in March. 1955.” Dr. Sutch said. “The balance of overseas payments will be the central problem unless the terms of trade improve still further. The composition of imports w’ill change j with a greater proportion of produced materials and equipment and a smaller proportion of consumer goods. “At the rate New Zealand’s exports are expanding, there will not be sufficient foreign exchange earned to pay for the necessary imports unless there is massive assistance from foreign borrowing. Such assistance is unlikely. There is a distinct possibility, therefore, that material living standards cannot be increased unless New Zealand’s export income rises more rapidly.” said Dr. Stitch. Attention to Economic Life “Much more attention must be paid to New Zealand’s economic life. A great expansion is required both in farming and manufacturing and. if we value our material standard of living (and apparently we do. above all else) then everything possible should be done to achieve the expansion as efficiently as possible. “We have learned some of the ways of making farming industry efficient. We have provided financial machinery, research facilities, Government advisory services, and statutory powers to producer and marketing authorities And few will be found to say it should not have been done,” he said. “The public attitude to manufacturing, however, is entirely different. Important ’ sections of public opinion do not even accept the protective tariff as a legitimate instrument in building manufacturing industry. For the sake of employing our rising numbers and of maximising living standards, the development of manufacturing will have to be recognised as one of the central elements of public policy. “As with farming, this involves a positive approach—appropriate financial machinery to assist manufacturers, research facilities advisory services, and statutory powers. Above all, it means a recognition that, as the country ;

grows, New Zealand’s main assets can only be the skill, experience 1 and intelligence of her people. ( “Small countries like Finland. , Denmark or Switzerland have even fewer natural resources than ‘ we have. Yet because of the skill of their people they are impor- ■ tant manufacturing countries. “Highly-paid labour should connote highly-skilled labour. New Zealand’s present preoccupation t with the tariff may be too negative an approach. Should we not 1 be more concerned with prOduc- < ing goods which have as their t main ingredient not raw materials 1 but brains and skill? This in- I volves for New Zealanders a new r attitude to skill,” said Dr. Sutch. -