INSTABILITY OF N.Z. ECONOMY

Press, Volume XCIX, Issue 29220, 2 June 1960, Page 16

INSTABILITY OF N.Z. ECONOMY

Dr. W. B. Sutch’s View

(New Zeatana Press Associations WELLINGTON. June 1.

One of the chief reasons for New Zealand's present economic difficulties was that for many years the country had ignored the inherent danger of instability in its economy, the Secretary of Industries and Commerce (Dr. W. B Sutch) told the Chartered Institute of Secretaries in Wellington today Fixed prices received for the Dominion's primary products during World War 11. and bulk buying thereafter by the United Kingdom, had halted fluctuations in prices Even when Britain reverted to a free market a price drop was averted by the Korean war. which drove prices uo again. “So from 1938 till 1953 we bad 15 years when fluctuations in prices did not worry us,” Dr. Sutch said. Now, New Zealand had become more specialised in its exports. and this had added to the vulnerability of her economy With a policy of full employment the country could not take the brunt of a deterioration in terms of trade by producing unemployment “We have always had this instability in our economy but in the past it showed up in unemployment.”

Full employment which led to an increase in the demand for imports, had been adopted as a national policy at a time when the export trade had become much more vulnerable, said Dr. Sutch.