Economy Reviewed In New Year Message

Press, Volume CIV, Issue 30946, 30 December 1965, Page 10

Economy Reviewed In New Year Message

Increased export production is the only real solution to New Zealand’s economic problems, says the president of the New Zealand Manufacturers’ Federation (Mr J. R. Maddren) in a New Year message. The text of the message is: “After another year of expanding production and further improvements in efficiency and productivity both on the farms and in the factories, the basis of New Zealand’s economy remains sound.” “There have been some expressions of uncertainty and pessimism about New Zealand’s economic future, but manufacturers do not share these feelings. They have read the warning signals, too, but believe while there is no room for complacency, neither is there any room for despondency. “A weakness in our present situation is that we keep on

living hand to mouth as far as overseas funds are concerned and relatively minor fluctuations in export prices can have major repercussions within New Zealand and lead to decisions of expediency. As manufacturers look forward to 1966 they are concerned that we have not broken free from the ‘stop-go’ policies which have handicapped New Zealand since the war,” Mr Maddren says. No Surplus Problem

“Our country has the resources to produce for our own use and for export. We have no problems of unsold surplus production; in fact, there is rapidly rising world population which needs more and more of the goods which New Zealand can produce most efficiently, even though at present they might not have the capacity to pay for all they need. “The only real solution to New Zealand’s problems is further to increase production for export. If more incentives are needed to achieve this, and I believe they are, then they should be provided. With the whole country behind a vital and expanding export drive, New Zealand can and will succeed. National teamwork for increased production is the key to solving our major economic problems. “While agricultural production is the mainstay of exports on which our economic health is based, the manufacturing industries also play an essential part, both in making the maximum volume of goods available for home consumption and by a steadily mounting value of exports. “Frustrated” “In their efforts to fulfil their role, manufacturers try to plan their own development two, three or more years ahead, but they are repeatedly frustrated. They cannot successfully plan ahead unless the Government will do the same,” he says. “As we prepare to enter an election year with overseas reserves down almost to a record low level, the edge is

taken off the confidence of manufacturers by a measure of uncertainty about the immediate future. Many still do not know what level of import licences they will receive for the remainder of the present trading year. The year is nearly half over and time left in which they can place orders for delivery within the period is rapidly Tuning out. “Further, although most sections of manufacturing are still enjoying buoyant conditions, the credit squeeze is starting to bite sharply and its effects are being felt most severely by industries which sell a substantial part of their products under hire purchase agreements. National Planning

“Feeling is very strong among manufacturers that our problems, both short and long term, will not be solved in the hurly-burly of party politics, but that a truly national policy be developed through consultation in which the interested parties have a full voice. “While our chronic shortage of overseas funds continues, controls and restraints within New Zealand will remain necessary. The burden can be equitably spread, and scarce resources allocated fairly, only if there is indicative national planning which does not put the economy into a straitjacket, but which sets targets and offers worth-while incentives in a climate of encouragement and maximum freedom. “In the conditions which exist today, 1967 could become another 1958. The national economy, however, is efficient and strong enough to resist this and manufacturers are prepared to co-operate in developing a programme which would reduce the possibility of harsh internal measures to counter a further deterioration in our balance of payments position. It would be a very happy New Year for New Zealand if progress could be made in 1966 towards greater stability in our long term economic development,” says Mr Maddren.