“STAGNANT” ECONOMY

Press, Volume CI, Issue 29931, 19 September 1962, Page 16

“STAGNANT” ECONOMY

Three Decades Of Controls’

(NX. Preu Association) AUCKLAND. Sept 18.

New Zealand should adjust its exchange rate to a “more realistic level,” hold down inflation, and give up import controls which both limited the ability of efficient firms to develop and which bolstered up weaker concerns. Professor C. G. F. Simkin, professor of economics al Auckland University, said today. Professor Simkin was addressing the annual conference of the Secretaries' Association of the Electrical Supply Authorities Association ”We have tried, for almost three decades, the alternative policy of State control and rigid protectionism," he said. “It has led us, since the terms of trade ceased improving, to near economic stagnation. There is surely a case for trying something else—either real competitive enterprise or real socialism. But thait, of course, depends upon how much we want economic progress.” New Zealand had a stagnant economy—an economy characterised by moderate, but apparently chronic, inflation.

Since 1957, the average New Zealand income had increased by 0n1y.1.7 per cent., a performance which compared favourably only with Britain, Canada, and Denmark, said Professor Simkin. Australia’s growth rate was 50 per cent, above New Zealand's, that of the Common Market countries was twice as high and that of Japan three times higher. In spite of Government efforts to grapple with postwar inflation. New Zealand had not succeeded in getting the annual rise in the cost of living down below 3 per cent, a year. Only France, Sweden, and Australia, among 14 other countries, had a worse record.