NO ‘CRASH TACTICS’

Press, Volume C, Issue 29444, 21 February 1961, Page 14

NO ‘CRASH TACTICS’

Long-Term Policy

Ifrm Out Own Reporter) WELLINGTON Feb. 20.

Two basic alternatives were open to the Government in its move to restore the balance of tne economy, said the Prime Minister (Mr Holyoake) in his broadcast address this evening. “The first is to adopt crash tactics and endeavour to restore a balance within 12 months,” he said. “This course could entail drastic measures such as increased rates of taxation, .drastic cuts in import licences and drastic reductions in overdraft accommodation for the commercial community, with the consequent loss of confidence that would follow. “This programme would inevitably result in dislocation in business, increased bankrupticies, business closing down and some unemployment”

Those policies could be followed in the hope that the economy would, after receiving the first shock, steadily build up again and perhaps be booming within three years. The Government had rejected that alternative; and decided to follow a longer-term policy of reconstruction. “It may well take more than three years to achieve our full objective,” Mr Holyoake said. It was to cure the country’s economic ills, which had been inherited, in such a way that the measures would not seriously impede policies for expanding industries and services, thereby increasing production and raising the standards of living for all. Production Needed It looks as if we are trying to live beyond our income by £2sm or £3om. perP j a more,” he continued. “This is a lot of money and represents a lot of goods but an increase of about 24 per cent, in production would restore the balance. If each of us was producing one-fortieth mm-e that would be enough" After announcing his Government’s policy, Mr Holy-

oake said administrative decisions would be announced

from time to time to give effect to the general policy. Some decisions would have to await’ announcement in the Budget, and some would require legislation which would be introduced in this year's session of Parliament

The country needed a steady guiding hand for a. considerable period ahead—not the straitjacket of regimentation but the guidance of Government direction when, and only when, that was necessary. “I have complete trust in our people and complete faith in our future, and so I have taken you into the Government’s confidence.” Mr Holyoake concluded. “Together, the Government and the people of New Zealand will overcome our difficulties and will build a stronger, a better and more progressive and prosperous nation.”