Hard Year Ahead, Says Mr Holyoake

Press, Volume CI, Issue 29748, 15 February 1962, Page 14

Hard Year Ahead, Says Mr Holyoake

(New Zealand Press Association)

WAIRAKEI, Feb. 14. Although events in the last 12 months had endorsed the Government's policy of gradual pressures to bring the economy back into balance, the coming year would be more difficult than the last, the Prime Minister (Mr Holyoake) told the annual conference of the Master Grocers’ Federation tonight. Mr Holyoake said that in adopting a course which had avoided violent crash tactics and “the resultant dislocation and disaster which followed such panic measures three years earlier," the Government had recognised certain dangers. “One real danger is that because we have not adopted crash policies, the people may imagine New Zealand’s problems have been overcome.” he said. “They may relax and fail to assist in the measures that are still very necessary.

“I cannot stress too strongly that each and everyone . of us must do our best not to place further strains on the economy.

“We must try not to draw on credit unnecessarily. We should try to save just as much as possible, to invest, and to make any stocks of imported goods we have go just as far as they can If we can follow this course with the measures the Government has taken we can haul through into calmer water.”

Mr Holyoake said the Government had taken the course of gradual and steady adjustment in the people’s Interest, but it could not be really successful without their cooperation.

Discussing the economic outlook, he said that when the Government took office the position, both internally and overseas, looked “very threatening. “This position is by no means corrected yet, but we did not expect to correct it completely within 12 months," he said.

After outlining the measures taken by the Government—the extension of the 1961 licensing period, tighter bank credits, hire-purchase restrictions and other restraints—the Prime Minister said the country still faced a difficult position, both internally and with the balance of overseas funds. "Bank advances are still too high,” he said. “Overseas funds are down to £47.6 million—and this contains £3l million of loan money—as against £5B million last year. “The deficit in our overseas trading for last year was £52 million—more than double the previous year. In two years there has been a total deficit of £76 million, or about -one-quarter of our total annual overseas earnings. "This position is steadily being corrected, but the coming year will be more difficult than last.”