F.O.L. POINTS PRESENTED

Press, Volume CVI, Issue 31344, 14 April 1967, Page 3

F.O.L. POINTS PRESENTED

(N.Z. Press Association) WELLINGTON, April 13. The Prime Minister (Mr Holysake) said today that his talks with the Federation of Labour this morning had been “interesting —but hardly fruitful.”

Mr Holyoake met a deputation, led by the president of the F.O.L. (Mr T. E. Skinner) which called to discuss the implementation of its 11 proposals made at recent stopwork meetings. “The deputation did not add anything to clarify the proposals or enhance their readability. “Right from the first jamboree it was apparent that the much vaunted 11 points were not intended as practical proposals for helping to ease the economic situation,” said Mr Holyoake. Mr Skinner said that New Zealand’s workers, ready and willing to back any effort to get their country out of its economic crisis, called on the Government to make “a clear and effective plan,” in which the workers would not be “sorted out as victims.”

The 11 points consisted largely of plans to develop New Zealand industry and production according to an over-all scheme with which everything—including import licences and export drives, would fall into line in the national interest. Other Points

The F.O.L. also asked for import control and selection, to nssure full employment; price control on consumer and essential goods; that taxation should be reviewed to institute more direct taxation; the resumption of the milk in schools scheme; the withdrawal of New Zealand troops from Vietnam; and an immediate 50 per cent cut in the funds which foreign investors could remit overseas. Mr Holyoake said that the Government would not restore the milk in schools scheme, or reintroduce land sales control.

In 1963, 64.5 per cent of the national taxation came from direct tax. In 1966, this figure rose to 66 per cent, a record level, he said. Further increases in direct taxation would be a substantial disincentive to higher production. Pensions had been increased not only to meet the rising cost of living, but also to let pensioners share in the growth in real income. There was a well-established procedure for salary and wage earners to share in higher productivity and be compensated for cost of living increases, said Mr Holyoake.

Production Rise Industrial productivity had advanced about 3 per cent a year for the last 10 years, compared with 2 per cent for the whole economy. A great deal had been achieved in developing industries in recent 1 years, and it was unfortunate 1 that the pace of development i

now had to be reduced temporarily. Every encouragement would continue to be given to projects involving products which were urgently needed, and for which domestic production would substitute for imports. “Particular encouragement will continue to be given to the production of goods for export,” said Mr Holyoake. New Zealand’s policy had always been to encourage worthwhile overseas’ investment Such investment would continue only if the rights to repatriate profits and capital were not interfered with.

On the suggestion that no more contracts be let to foreign interests, Mr Holyoake said: “It is the Government’s policy to encourage local firms to expand their capability, both financial and technical, to enable them to undertake larger works. Local firms can combine as they did for the Marsden Point power station.

“Only in exceptional cases have tenders been invited by advertisement outside New Zealand. It is thought unlikely that any will be so invited until contracts for a nuclear power station are sought. “Vital Interest” “New Zealand has vital interest, both from trading and defence points of view, in maintaining a strong shipping industry. “Capital outlay to buy or charter ships for a state shipping line would be excessive —£2.sm to £3.5m a ship of foreign exchange. At least six vessels would be needed to inaugurate a New Zealand line.

“Obviously implementing this long-term proposal at present would not ease the shortterm economic situation.” About two-thirds of this country’s import trade was under licence and was already subject to a system of selective import control. Items in the decontrolled section were basic raw materials for industry, basic equipment for primary production, basic essential foodstuffs and essential medical supplies and educational material.

“What would be served by bringing these essentials back under licensing?” Price Control The F.O.L.’s call for reintroduction of consumer goods price control was no doubt aimed at restraining increases in the cost of living, and containing internal costs within reasonable bounds, said Mr Holyoake. These were laudable objectives, but the Government was not convinced that the reimposition of price control on

any widespread scale—with all the attendant difficulties and anomalies it would create —would achieve what the F.O.L. wanted. New Zealand forces were in Vietnam to honour treaty obligations, and to help a free people fight external Communist aggression. “This whole question was a major issue of the general election only last November, when the Government received a clear mandate from the people for its policy,” said Mr Holyoake.