‘Government Refuses To Panic’

Press, Volume CIV, Issue 30831, 17 August 1965, Page 1

‘Government Refuses To Panic’

The Government was determined to avoid “panic measures” over the £22m deficit in the overseas balance of payments, said the Minister of Finance (Mr Lake), when he spoke at the jubilee dinner of the Real Estate Institute of New Zealand, held at the Hotel Russley last evening.

Panic measures had been advised by some of the Government’s critics, said Mr Lake. “Many of you will have seen press statements by spokesmen tor‘the Opposition and others, which emphasise the unfavourable elements in our economic situation, without drawing attention to favourable -spects.” Mr Lake spoke on the economic outlook, to a gathering of about 200 real-estate men and their wives. “You will be especially interested to hear my views.” he said. If towards the end of this year the net overseas assets of the banking system were

still lower than desirable—having already fallen £2lm as at June 30 —the Government could draw from the International Monetary Fund, said Mr Lake. “This is quite a sensible policy, as most businessmen will readily understand,” he said. “After all, most people are familiar with the use of temporary bank overdrafts to avoid stop-go policies in their own business when confronted with a seasonal or fluctuating demand.” Adhering To Policies The Government, said Mr Lake, was determined to adhere to its economic policies —unless it was forced by events outside its control to opt for a lower rate of economic growth. “The Government's economic policy is aimed at maintaining a steady rate of economic growth,” Mr Lake said “The objectives of this policy are to create a favourable environment in which farmers and businessmen can make sound, long-term decisions about investment and production —and also to provide a steadily-rising standard of living for all New Zealanders ”

But some of the Governs ment’s critics were taking the : most pessimistic view of the ■ economic situation —"and of I course, by accident they could be right,” said Mr Lake. ■ If the worst happened, and i all export prices dropped dras- . tically together—“or if other evidence suggested we were , heading for a seriously large balance-of-payments deficit,” , said Mr Lake—the Govern- . ment would have to take “appropriate action.” “But I expect that the prophets of gloom will again be wrong, as they have been

so frequently in post-war years,” Mr Lake said. In proposing the toast to the Real Estate Institute of New Zealand, Mr E. G. Keenan recalled that in 1915 a group of “zealous, dedicated men,” representative of New Zealand land agents, had met in Wellington to form an association “to raise standards and status in the eyes of the public, and to give land agents their rightful place in society, based on knowledge and integrity.” Mr H. Cassidy, the Dominion president of the institute, replied.