‘Room To Manoeuvre’ In Budget

Press, Volume CX, Issue 32321, 12 June 1970, Page 1

‘Room To Manoeuvre’ In Budget

(New Zealand Press Association)

WELLINGTON, June 11.

Just two weeks before he delivers the Budget, the Minister of Finance (Mr Muldoon) tonight said: “There is no crisis at the present time, and the economic difficulties that face us, both short-term and long-term, call for much less severe measures than was the case in 1967.”

Addressing the South Canterbury Chamber of Commerce, at Timaru, he said that economic activity was running slightly too fast.

“But it is necessary to emphasise that corrective action needs to be related to the degree of overheating,” he said.

The situation could be profitably compared with the early part of 1967, when swift and severe measures bad to be adopted. ■“lrrespective of what may be done in this year's Budget, 1 repeat what I have said many times before, that economic policy is a flexible matter, and correctives must be applied from time to time

regardless of whether or not it is the time of the annual Budget,” he said. One of the keys to this year’s Budget would be the necessity of ensuring that the

economy remained in a state which was capable of being adapted to meet whatever emerged from Britain’s negotiations with the Common Market. Mr Muldoon said that continuing low prices for wool and dairy products had brought a “crisis of confidence in the farming industries.”

The country had room to manoeuvre—which it had not had in 1967—because external funds were in such a good position, he said. The Budget would show an Increase in Government estimates this year, and this would be higher than desirable because of the effect of wage increases, which automatically pass to the State services through the ruling rates procedure. “Apart from this, however, estimates are being held very tightly in the face of demands from all parts of the country for expanded spending in most departmental votes.

“The tight hold of the last three years has built up considerable pressure, but this is not the year in which it should be released,” Mr Muldoon said.