Joint Action Urged

Press, Volume CVIII, Issue 31802, 5 October 1968, Page 14

Joint Action Urged

Joint action by Australia and New Zealand in overseas marketing of their products is urged by Mr F. W. Holmes, economics manager of the Tasman Pulp and Paper Company, Ltd, a former Macarthy professor of economics in Wellington and the first chairman of the Monetary and Economics Council, in the latest economic bulletin of the Canterbury Chamber of Commerce.

He also urges increased cooperation in promoting tourism to Australia and New Zealand and (with Pacific neighbours) to the Pacific region generally. There could also be considerable merit in joint Government action to seek means of stemming the rate of growth of so-called invisible expenditure overseas. This

had played an important part in aggravating balance of payments problems, particularly the growth of transport charges and travel expenditure, he says. Mr Holmes believes it would be in the national interest for both governments to expose a much wider segment of primary and secondary industry to competition across the Tasman by gradually reducing duties on more products under the free trade agreement. The more efficient enterprises would obtain a broader and less restricted market for their better products and competition would make it harder to continue making products of inferior quality. There would be pressures to drop uneconomic lines and concentrate on more saleable items. Governments, too, would be made more conscious of the disadvantages of allowing inflationary conditions to develop which would weaken the competitive position of their own producers. They would also be more aware of the need to revise policies *

which would put domestic industries at a competitive disadvantage. “Developments in the last year suggest we have probably seriously underestimated the competitive capacity of our producers and that, especially since devaluation, a large number of them can hold their own in free competition with their Australian counterparts,” says Mr Holmes. New Zealand exports across the Tasman, for example, had grown from $32 Im in 1966-67 to ss2} m in 1967-68. Even allowing that ssm to s6m was attributable to seven months of exports in depreciated New Zealand dollars, the increase was significant and indicated that greater freeing of trade offered more opportunities and fewer dangers than pessimists had forecast. Mr Holmes says both Governments must make the free trade agreement the nucleus for a growing volume of cooperative activity directed not only to their domestic problems but to increase their capacity in international 1 trade and finance.