Labour And Govt. Views On Economic Planning

Press, Volume CIV, Issue 30802, 14 July 1965, Page 16

Labour And Govt. Views On Economic Planning

“There must be a Minister of Economic Affairs,” said the Leader of the Opposition (Mr Nordmeyer) when he and the Minister of Labour (Mr Shand) spoke on economic planning to the Canterbury branch of the Economic Society last evening. “His sole responsibility must be to ensure that economic planning is carried out—not that he himself does the planning, but that he is responsible for co-ordinating those to whom the various sectors of planning are committed.”

Mr Nordmeyer and Mr Shand spoke to a very full gathering, about 70 being present. They spoke in turn, neither interrupting the other.

Mr Nordmeyer said that New Zealand should try. in normal circumstances, not to borrow overseas

He was mindful, he said that the country had grown immensely by relying on outside capital to increase industrialisation, but the point had now been reached where the cost of servicing borrowings—State and private—had actually exceeded the amount of new borrowing undertaken “To increase the rate of borrowing—as some people suggest—seems to me simplv to nostnone the eyil day.” Mr Nordmeyer said. Economic Affairs On a Ministry of Economic Affairs. Mr Nordmeyer said that Ministers, because of their departmental actvities tended to see things through the eyes of their departments, and not to see the picture as a whole.

“If we are to have effective planning we must have a coordinating Minister, and ensure that that Minister sees that other Ministers see not the little segment for which they are personally responsible but something of the whole view,” Mr Nordmeyer said.

On monetary and fiscal policy, Mr Nordmeyer said that co-ordinated planning must involve incentives—“they can. and must, take different forms." he said. As Mr Shand had said, there must be incentives for increased production, and for farmers to plough back capital into farming activities.

There was a need to coordinate planning on the agricultural side with planning on the industrial side. “One of our defects in the past is that we have attempted to deal piecemeal with the problem and not look upon it as whole,” Mr Nordmeyer said. Mr Shand's Views He emphasised that manufacturing in New Zealand was important. “I believe full employment is imperative in the modern economy,” Mr Nordmeyer said. “It can only be maintained in proportion as we are prepared to expand—and keep on expanding—our manufacturing industries.” As for import control, said Mr Nordmeyer, he did , not concur with Mr Shand. ‘ Import cbntrol had come to stay

Mr Shand had said that import control was as useful “as morphia is to the control of cancer.” It * reduced the pain and worry, but did not

cure anything. “Import control can become just as much a habit as the taking of morphia,” Mr Shand said. “Having accepted it, it is damnably difficult to move away from it.” Mr Shand said that the managed economy presented the greatest political challenge since the party system of government had grown up. The great problem today was the creation of an informed public opinion to accept a planned economy so that a government could govern well. Mr Shand said that he saw the objectives of a planned economy as economic growth, full employment (“all political parties have committed themselves to full employment,” he said), and stability “But it’s not much good

having full employment and stability if you do not achieve an adequate growth rate,” said Mr Shand.

What was a reasonable rate of growth was a matter of opinion. Mr Shand defined economic management as “the art of reconciling these three objectives with the facts of life."

The facts of life, he said, were the need to achieve a reasonable balance of overseas transactions, and the tremendous dependence of New Zealand on a narrow range of pastoral products extremely vulnerable to violent fluctuations in price. “This is where we are in a more difficult position than any other country with the more sophisticated economy,” he said.