Car Assembly NO GOVT INTENTION TO CLOSE PLANTS

Press, Volume CVIII, Issue 31662, 24 April 1968, Page 32

Car Assembly NO GOVT INTENTION TO CLOSE PLANTS

(New Zealand Press Association)

WELLINGTON, April 23.

New Zealand’s car assembly is inefficient in economic terms —but the Government has no intention of cutting down the number of car assembly plants.

This was made clear at a press conference today by the Minister df Finance (Mr Muldoon). There had to be a balance between absolute efficiency and public choice, he said.

Mr Muldoon said: “The car assembly industry is inefficient in economic terms and we know it has too many plants. But we have had no idea of folding up a lot of plants. “We have taken the view that whereas it might be efficient for us in this country to produce only one big car and one small car at one

plant, we don’t think the New Zealand public would want that.”

The Minister emphasised that the Government was not going to shut down industries on the advice of the World Bank, the Monetary and Economic Council or economists. Local Content

He was commenting on claims that the World Bank, in a highly critical report on the New Zealand economy, had recommended the closure of some of the country’s car assembly plants. He said the Government wouud like to see greater local content in New Zealandassembled cars, but forecast in this context that under the Australia-New Zealand Free Trade Agreement, New Zealand car components would be supplied to both Australian and New Zealand industries.

Asked if there was any way in which the Government could correct the inefficiency within the car assembly industry, the Minister replied: “I wouldn’t think so." Government Agreement Assembly plants had come into existence in most cases by direct Government agreement. “There is no thinking in my mind that this procedure would be reversed,” he said. Mr Muldoon said he was bound to say that for purely economic reasons—such as increased sales tax and devaluation—some of the cars from Japan and some European countries were selling more slowly. Mr Muldoon claimed today that the Leader of the Opposition (Mr Kirk) lived in a “secret and mysterious world of his own making." Report Mentioned

He was alluding to Mr Kirk’s statement that a report from the World Bank about the New Zealand motor assembly industry had been kept secret. Mr Kirk said that the report recommended the closing of some New Zealand car assembly plants. The Minister said the fact was that last year, when a group of World Bank officials were in New Zealand

making investigations for a report on the New Zealand economy, he not only announced the fact—but arranged for Mr Kirk and others to spend some time with them.

“1 have no doubt that they expressed their views on the New Zealand economy as freely to Mr Kirk as thev did to me, and doubtless this is the source of his information,” said Mr Muldoon.

Drafts Received "Contrary to his statement, however, the Government has not yet received the report, although more than one preliminary draft has been received and returned with additional information, comment and corrections.

“I expect that material from the final report will be used in preparing some of the background papers for the national development conference later this year.” Mr Muldoon said as to the World Bank’s views on the New Zealand motor assembly industry, they appeared to be very little different from those of the Monetary and Economic Council. “But I have already, some weeks ago, discussed this fully in a speech that was widely reported at the time,” he said.