CONSUMER SPENDING

Press, Volume C, Issue 29467, 20 March 1961, Page 14

CONSUMER SPENDING

“Firm Control Needed”

Consumer expenditure in New Zealand must be kept under firm control if the country was to progress without instability, said Mr A. R Low. assistant Governor of the Reserve Bank in Christchurch on Saturday. He was speaking to more than 400 members of the Independent Grocers’ Alliance on the role of the retailer in the New Zealand economy. Capital expenditure and consumption in recent years had tended to be greater than the physical resources available. he said. The economy had been put under continuous strain. Although productivity m New Zealand was steadily increasing, the rate of growth was one of the slowest in the world. The terms of trade had in recent years been unfavourable to New Zealand and this trend was likely to continue for at least some months. While this situation continued, it was undesirable to devote more expenditure to consumer goods and services, yet Government expenditure on these items had been rising steadily, said Mr Low Three solutions were possible. Any attempt to maintain a stable economy could be abandoned but this would soon cause accentuated problems of inflation and balance of payment crises. Capital Spending A second solution, reduction of the rate of capital formation, would be unwise because capital provided the means for increased production in the future. To reduce capital expenditure would endanger future growth. The only means available for relieving the strain on the New Zealand economy was by controlling consumer expenditure. This in its turn implied more saving. “I would firmly suggest that this be regarded as the main means by which the economy can be kept both stable and growing,” said Mr Low. Mr Low said that he did not want to see a reduction in retail turnover. “I want and expect consumption to rise, but I see trouble for the economy if consumption rises faster than our limited resources and slow rate of growth permit. “Nothing that I have said, however, prevents any grocer from increasing his turnover more rapidly than the average if he can do so by offering better quality and better service,” he said. Maori Centenarian Dead (N.Z. Press Association) AUCKLAND. March 19. A 105-year-old Maori, Mr Te Ahu Ahu, died today at the home of a daughter in Pukekohe. He was said to have taken part in the final stages of the Maori Wars. He is survived by five sons and daughters. A tangi at the Maurea Pa, Rangiriri, will precede a service at the Maori burial ground on Mount Taupiri.