N.z.’s Economic Position “Considerably Better”

Press, Volume XCVIII, Issue 28887, 6 May 1959, Page 14

N.z.’s Economic Position “Considerably Better”

(tveui Zealand Press Association)

WELLINGTON, May 5. New Zealand’s economic and trade position and prospects looked considerably better today than appeared likely last year, said the Prime Minister (Mr Nash) in his annual Parliamentary Labour Party report presented tonight to the New Zealand

Labour Party conference. ‘‘The balance-of-payments figures for the March years show better than do the calendar year figures the degree of improvement,” he said. “Excluding Government borrowing overseas, there was a deficit for the year ended March, 1958, of £ 39.3 m. On a similar basis the deficit foi the year ended March, 1959, was £ 18.8 m—still large, but a sizeable reduction, and particularly good when it is compared with a real deficit of more than £3lm at the end of 1958, only three months earlier.

“The reduction in imports, Government borrowing abroad, and some recovery in our terms of trade are all better reflected in the March year result. Overseas reserves are now at a much higher level, £B2m at April 22. “The best news on the economic front has been the recent rise in wool prices.” said Mr Nash. “The lift, which was cautiously expected for some time, has come a little too late to have a significant effect on this season’s oveY-all receipts from wool (though the expected extra £2m or so will be useful), but it is a hopeful augiiry for next season. Wool is perhaps the most unpredictable of our exports, however. Dairy Produce, Meat “Dairy prices are at present quite good, but it would not be true to say that the causes of their instability have been removed. The prospects for meat appear reasonably good, though it is unlikely that the market for beef in North America will last long on the scale of 1958. “Over all, the situation is brighter,” Mr Nash said. “Already the Government has reviewed and relaxed 1959 imports, which were initially based on estimates made last year of what New Zealand could afford. The Government will make further relaxations as and to the extent that economic circumstances permit, passing on improvements to the community. But we will not jeopardise the economy by giving concessions that are not warranted. “In 1957 New Zealand was living beyond even record overseas income. That situation cannot continue. Without heavy borrowing. large balance-of-pay-ments deficits cannot be incurred, but the Government cannot continue to borrow overseas as heavily as last year. Therefore we must live within income, earn more overseas, and spend less. “Not Transitory”

“It must be recognised that New Zealand’s balance-of-pay-ments problem is not a transitory phenomenon, though it varies in

intensity with changes in our terms of trade, but is a constant pressure on our capacity to earn overseas exchange. As such, it will be a feature of the New Zealand economy in future years as far ahead as can reasonably be foreseen.

“The political moral is that no government or party can attempt to bribe the public with offers of an importing spree without doing grave harm to the economy. That is what the National Party has done, as a Government in practice, and as an Opposition by implied promises,” said Mr Nash.