MONETARY COUNCIL “UNNECESSARY”

Press, Volume CII, Issue 30233, 11 September 1963, Page 16

MONETARY COUNCIL “UNNECESSARY”

Labour Contends Work Duplicates Other Bodies’ (From Out Parliamentary Reporter} WELLINGTON, September 10. The argument that the Monetary and Economic Council was an unnecessary body and should be abolished was advanced in Parliament today by the Opposition which claimed the Government had failed to implement most of the council’s recommendations, and that the council merely duplicated work being done by the Treasury. In reply, the Prime Minister (Mr Holyoake) mentioned a number of recommendations of the council which had been adopted, and the Minister of Finance (Mr Lake) said that he would be prepared to tell the House why others had not been accepted. “The main value of the council is that its members have the time to take an objective look at the economy,” said Mr Lake. “It can initiate its own inquiries. Usually Government departments take a lead in initiating inquiries. “It publishes a report which is of considerable educational value and it has strong contact with the business community which is of value to the Government.”

The Government obtained Treasury reports on the council’s reports, said Mr Lake.

Mr R. J. Tizard (Opp., Otahuh) said Labour members were not happy about the functioning of the council, and were prepared to move for its dissolution.

Speaking to the Treasury estimates, which provide for £9250 for fees and expenses of the council, Mr Tizard said it had produced pages of recommendations which the Government ignored.

“As members of the Public Expenditure Committee, we have asked for the reasons why some recommendations have been rejected,” Mr Tizard said. “Mr Lake has refused to supply details, or to say which have been acted upon.” Mr R- D. Muldoon (Govt., Tamaki) said the council was promised in the National Party’s election policy. The important point about its deliberations were that they were publicised, and the people knew what an independent authority thought about economic and monetary matters.

‘This would surely not be popular with a Labour Government.” said Mr Muldoon “The existence of such a body means that its recommendation are made public, irrespective of whether or not the Government of the day should implement them. “If we, as a Government, have not accepted some of the recommendations, we must be prepared to go to the people and explain our actions. We are prepared to do so. I do not think a Labour Government would be.”

Redundancy Alleged Mr M. A. Connelly (Opp., Riccarton) said the Labour Party had an economic policy —a policy which had lifted the country out of the depression and set it on the road to progress The council was redundant because the Economic Research Institute already existed. The institute was completely independent and separately financed- Newspaper editors also gave their advice: so did Federated Farmers and the Chamber of Commerce Mr Holyoake listed recom-

mendations made by the council which had been implemented. One was that primary production targets for the next five or 10 years should be set.

In the council’s first report in 1961 a supplementary Budget had been suggested, he said. This had not been accepted by the Government “as we thought we could get through without it, and we had said we would reduce the rates of taxation.’’ Recommendations for loans and a maximum of £2OO million for bank advances had been adopted. A recommendation for a review of the capitalisation of the family benefit had not been accepted. Committee Vote

The Deputy-Leader of the Opposition (Mr Watt) said the Public Expenditure Committee had asked Mr Lake for the recommendations of the council which the Government had implemented, and refused Opposition members on the committee had moved that the council be deleted from the estimates and this was defeated only on the casting vote of the chairman. The “Associate” Minister of Finance (Mr Seath) said the council’s early reports dealt largely with the faults of the previous Government’s administration. Mr Lake saad he was not prepared to give the Public Expenditure Committee reasons why certain of the council’s recommendations were not accepted.

After detailing what action the Government, had taken on the council’s recommendations, he said he was sure there was now a better public appreciation of the Government’s economic policy The Leader of the Opposition (Mr Nordmeyer) said he was amazed Mr Lake had refused the committee information it had a right to seek. The committee had been appointed by Parliament to examine Government expenditure. Jt appeared the expense incurred by the council was wasted.

“What information has this body given the Government that is not already available from Government departments? What proposals put forward by the council could not have been advanced, and have not been advanced, by the Minister’s own officers?” Mr Nordmeyer asked. Economists were willing to give advice at the drop of a hat, and free, he said. Yet the Government was paying for it. The Government had adopted advice it would have adopted in any case. Was the council justified? In spite of huge Government expenditure, £9250 was still a lot Matter of Policy Mr J. B. Gordon (Govt., Clutha) said the people were only too happy to nave an outside body examine and comment on monetary and economic issues. Treasury officers had told the Public Expenditure Committee that the council’s information was of great value. The motion to delete the council’s vote, put by Opposition members on the committee, was ruled out of order because it was a matter of Government policy Mr N. E. Kirk (Opp., Lyttelton) asked whether the council’s advice conflicted with advice by the Treasury, and which advice prevailed? Was the Treasury doing the same work on economics as it did before the council was established? Was this work being duplicated by the council?

“How does the Government's picture of comfort and satisfaction square with the council's view, in its January report, that the material standard of living of the average New Zealander has probably declined?” Mr Kirk asked.

Mr Tizard a:-ked if any recommendations in the reports of the council bad been carried out contrary to Treasury advice. “If not, is it just fulfilling the Government’s passion for committees?”

Mr W W. Freer (Opp.. Mt. Albert) said the Minister could surely tell the House the use of the council. “He is giving us the same runaround he gave the public expenditure committee'’ Mr Muldoon challenged the Opposition to say that, if it became the r ovemment, it would abolish the council.