Favours Treasury As Nucleus Of Planning

Press, Volume CIV, Issue 30822, 6 August 1965, Page 12

Favours Treasury As Nucleus Of Planning

New Zealand is sensible in building its economic planning agency around the Treasury, in the opinion of Professor E. W. Holmes, professor of economics at Victoria University, who was chairman of the Monetary' and Economic Council until last year.

In its research section, the Treasury had a nucleus of able people, well fitted to form the basis of a planning secretariat, said Professor Holmes, in an address to the Canterbury branch of the Economic Society last evening. Treasury officers were probably more experienced than those of other State departments in the problems involved in co-ordinating financial and physical plans. “There is merit in having long-term planning closely integrated with the formulation of the annual Budget and other aspects of economic planning,” said Professor Holmes. “Putting long-term planning in the Treasury seems well calculated to achieve this end.” Professor Holmes spoke to the society on planning and government—an address in a series on planning which has been arranged this week. Definition Quoted Mr Enoch Powell, a candidate for the leadership of the Conservative Party in Britain, had described economic planning as “an elaborate conspiracy or charade to pretend that the market can be replaced by some new device which will not only do everything the market does, but prevent inflation as well.”

“There are some grains of truth in what he says,” said Professor Holmes, “but 1 cannot align myself with him.” Professor Holmes argued in favour of more comprehensive economic planning for New Zealand. New Zealand had plenty of Government enterprise, intervention, and control, but so far there was no central planning agency of any size, no comprehensive medium-range or long-range plan, “and no published programme of Government expenditure as a whole for more than about nine months ahead,” Profes sor Holmes said. “Worth While” It would be worth while, for a number of economic and political reasons, to engage in longer-range and more comprehensive planning, said Professor Holmes. Some of these were:— It would focus attention on necessary action to secure a faster rate of expansion in New Zealand and other important national aims. It would provide a better framework than present procedures for co-ordina-ting the decisions of various agencies of Government and private sectors. I' would supply better guidance to both public agencies and private enterprises on possible trends of supply and demand, and therefore provide a firmer basis for formulating investment.

trade, and development policies. It would establish benchmarks against which proposals to increase expenditures and money incomes could be judged. It would help to stimulate more co-operation among different groups in a joint endeavour to achieve important national objectives. It would emphasis® the longterm objectives of New Zealand, and relate them to available resources. Govt. Responsibility If an economic plan was to work, and not merely be a paper plan, the Government must take responsibility for it said Professor Holmes. The agency charged with drawing it up. and revising it must be fully responsible to the Government and nbt engaged in public debate with the Government. But the planning agency, and its head, must be given freedom of manoeuvre, and certainly not be expected to push particular Government policies.

Planning would require the Government to be much more precise about its objectives, said Professor Holmes. “This is all to the good in a democracy,” he said. “But most politicians, in my experience, prefer to leave their objectives vague and general, because this reduces the possibility of criticism from the Opposition and the public." Planning would depend greatly on the willingness of the Government to change past attitudes in this respect, he said.

The Monetary and Economic Council, which some persons viewed as a good candidate for early execution, he would like maintained, said Professor Holmes —provided it remained an independent and expert body. It had an important function in planning, acting as an economic Ombudsman, or public watchdog, on planning issues.