STATISTICIAN LOOKS AT NATIONAL ECONOMY

Press, Volume XCVIII, Issue 28984, 27 August 1959, Page 15

STATISTICIAN LOOKS AT NATIONAL ECONOMY

Let us not forget the lesson of the recent past. It is unreasonable to expect to take in living standards more than we produce by our efforts,” Mr J. V. T Baker, the Government Statistician, told members of the top management conference last evening at the end of his review of the general economic situation in New Zealand.

Mr Baker was the first speaker in the conference, arranged by the New Zealand Institute of Management, which will last until Friday.

Ending his address with remarks on production and living standards, Mr Baker said it seemed to him reasonable, and indeed desirable, for the buying public and industry to accept the tax reductions of October, 1959 “as an indicator that by then the needed period of marking time in living standards will have gone on for long enough to enable productive progress to catch up.” Living standards could then move forward again parallel with increases in production to a labour unit, he added.

Looking to future development. Mr Baker said there was some very woolly thinking in New Zealand on overseas borrowing for development. It probably arose through drawing a parallel with the private citizen’s borrowing where no parallel existed. The average citizen had one really major capital outlay in his life, when he financed his own home, and he borrowed substantially for it. He borrowed with the idea of repaying within the lifetime of the dwelling. Overseas borrowing by the country was quite different. Only when there was an exceptionally heavy new capital commitment did the country’s need to borrow approach that of the individual. The country as a whole had a flow of new capital commitments

every year and could form the habit of meeting them out of current income or form the habit of borrowing.

. If New Zealand was to meet its capital needs out of current income, some restraint on demand might be necessary to ensure that internally - generated savings were maintained.

New Zealand’s aim was not to become self-sufficient, to have a continuing favourable balance of payments or to reduce dependence on trade, Mr Baker continued. New Zealand was inevitably a trading nation and must expect periodic reverses in export markets, so it should aim at widening the range of exports and maintaining a balance in the overseas trading position. Earlier, Mr Baker said the 1958 position was that while high importing was in large measure a result of high internal demand, reduction of internal demand would not have changed' the habit of high importing sufficiently rapidly to avoid the risk of external bankruptcy. It was equally apparent that import controls alone would not change the level of internal demand.