Pessimism Over N.Z. Economic Prospects

Press, Volume CI, Issue 29854, 21 June 1962, Page 13

Pessimism Over N.Z. Economic Prospects

In the prospect of Britain’s joining tty? E.E.C. he found real grounds for pessimism, said Professor A. J. Danks, professor of economics at the University of Canterbury last evening.

Professor Danks and Dr. J. D, Stewart, senior lecturer in farm management at Lincoln College, were speaking to members of the Canterbury branch of the New Zealand Society of Accountants on the effect on New Zealand’s economy of Britain joining the E.E.C.

"We are right in the gun, and we must just keep on hoping that someone will find a formula,” said Professor Danks. "I don’t know where it is.” • He could not see any easy

solution whatsoever to the question, he said. It was a serious thing for New Zealand and he did not know quite what . was going to happen. Britain had not “kept up with the Joneses” across the channel, Professor Danks said. "I find it very hard to think that Britain is doing wrong or going to suffer by making these overtures to the E.E.C. It would seem she stands to gain a great deal.”

The most serious consequences were being faced by New Zealand. It would either have to find other markets or reach an agreement with Britain and the E.E.C. New Zealand was also caught by the rigidity of its economy. "We have not got an industrial economy which we can play like a piano,” Professor Danks said.

Could Britain put this to the E.E.C.? The Six were not going to weep over New Zealand’s plight—they could point out that the country was relatively well-to-do, with a high standard of living and a considerable welfare structure. They could point to their own agricultural communities. which were much worse off. Protectionism Dr. Stewart said the basic agricultural policy in Europe was protectionism. The tariff wall against New Zealand could be up to 20 per cent, and this could be bolstered by more insidious means, such as import levies. If only confronted by tariffs. New Zealand might still be able to undersell in the Six countries, but the import levies would change this. Dairy products would be the hardest hit. It estimated that in time Europe’s own dairy production would exceed its demand. The potential of the French dairy industry alone was tremendous.

He thought New Zealand should be looking at the possibility of expanding wool production much more than it was. There was no doubt the country was in for a difficult period.