Economy report ‘not happiest picture’

Press, Volume CX, Issue 32486, 22 December 1970, Page 1

Economy report ‘not happiest picture’

(New Zealand Press Association) WELLINGTON, December 21. A report on the economy of New Zealand which was before the Cabinet today did not paint “the happiest picture,” the Prime Minister (Sir Keith Holyoake) told reporters tonight. But no further measures were being considered at present he added.

The report referred to the world-wide situation of inflation. “The picture generally is of a continuation, but diminishing and levelling out of problems which we have had in the last year,” Sir Keith Holyoake said. The Cabinet discussed the price freeze and what should happen when .it was due to end next month. The Cabinet Economic Committee would be looking at it again and a decision would probably be announced this week, Sir Keith Holyoake said. He said he was not as disappointed as he was last week with the rate of progress on discussions on wage relativity, but he was still disappointed “at the pace of agreement.”

Sir Keith Holyoake said that he was still hopeful that agreement would be reached on relativity and that the

question of wage guides would not arise. He said he hoped that there would be a settling down on wage demands in the new year. Freeze attacked "It has been suggested that there could be some merit in extending the price freeze,” said Mr A. R. Simm, president of the Associated Chambers of Commerce of New Zealand, in a statement today. “When the price freeze was proposed, my association agreed to co-operate in working for industrial harmony and wage relativity. But we made it clear that a price 1 freeze had never worked and would never work in isolation. Such a lop-sided discipline is inequitable and unjust and its short-term acceptance was only an earnest of good faith. “The plain facts are that New Zealand economically is inextricably tied to the modem world outside and she cannot get a divorce. She cannot pull down the economic blinds and hide from the

passing parade of world inflation. Not Father Christmas but Father Time leads that procession, “Today the warehouses are filling with imported goods and raw materials bought on world markets with their rising prices. If they are sold at a loss because of the price freeze, then the investment of the little capitalist goes down the drain with that of the tycoon. “All the signals already flash warnings, and an extension of the price freeze would only aggravate the situation, the losses and the unrest.

“My association believes, as it has done from the beginning, that only the Government can create a stable economic climate and should long ago have given a positive lead.

“Mini-Budgets and payroll taxes only exhibit our inability to manage our wealth at a time of the nation’s greatest prosperity. Jobs depend upon profit-making commercial enterprises. “The Public Service depends upon the ability of these concerns to pay taxes. “Fundamentally, the balance between supply and demand must be corrected by positive and productive action, not by a series of negative reactions. The Government can go a long way towards this balance and towards industrial harmony around a policy of greater immigration, postponement of non-productive works, and the further release of import control balanced by tariff protection where justified. “We must cease to rely on subsidised private immigration and mount an explicit immigration policy in balance with the targets and the natural resources revealed by the National Development Conference," said Mr Simm.