Economy ‘Will Be Subdued’

Press, Volume CVII, Issue 31407, 28 June 1967, Page 23

Economy ‘Will Be Subdued’

For the next 12 months, possibly longer, economic activity will be reduced to a level more commensurate both with New Zealand’s lower export earnings and with difficult overseas borrowing conditions, says the Commercial Bank of Australia, Ltd., in its latest economic survey.

“The import licensing schedule, which includes twothirds by value of total imports, has been cut over a wide range of items by 20 per cent. This will assist in correcting the deteriorating balance of trade, reducing the import bill by about £2O million,” the bank says. “The Government estimates

that restraints, in the form of increased taxes and duties, introduced in May, 1967, will raise revenue by about £25 million.

“These will subdue the economy and should bring realism to the outlook of businessmen. “The terms which would apply should Britain be admitted to the E.E.C. are an unknown quantity but the threat which her entry poses to New Zealand will be an additional dampening influence on the economy. “Exports of butter, cheese and meat, particularly lamb, find their major sales outlet in the United Kingdom, but this market could be blocked or substantially diminished by restrictions arising from E.E.C. policies. “Vigorous Search”

“Although New Zealand marketing organisations are vigorously searching for new markets and diversifying, or at least modifying their products, export income from these commodities could be substantially reduced. Some comfort can be gained from the British Prime Minister’s assertions that he considers it to be a duty to find a permanent and imaginative solution to New Zealand’s problem. “The criteria for knowing when such a solution has been found, of course, are not stated.

“It should be emphasised, nevertheless, that the problem is a long-term one, that new markets are being developed and that arrangements satisfactory to New Zealand’s interests may be concluded.

“In any case, United Kingdom entry to the Common Market is by no means a foregone conclusion.”