Legislation to come early on stabilisation plans

Press, Volume CXI, Issue 32541, 26 February 1971, Page 2

Legislation to come early on stabilisation plans

(New Zealand Preu Association) WELLINGTON, February 25. Early legislation would be introduced in Parliament to give effect to the economic stabilisation plans already announced by the Minister of Labour (Mr Marshall), it was said in the Speech from the Throne given by the Governbr-General (Sir Arthur Porritt) jit the opening of the 1971 session today.

< “The object of these measures is to limit increases in remuneration on average to less than 7 per cent in the year from January 1,” Sir Arthur Porritt said.

; • “It is my Government’s hope that employers and employees will be able to reach agreement on new rates of remuneration within this guideline. -• “In respect of increases in excess of the guideline, the parties will be. expected to apply to a remuneration authority,” he said. The proposed legislation would include provisions making it an offence to increase remuneration above 7 per cent, or such other percentage as might be fixed from time to time by Order-

sn-Council, except in defined Special circumstances or •with the approval of the remuneration authority.

These latter provisions would be brought into force only if it became clear that The Government’s stabilisation objects would not be achieved by voluntary acceptance of the approved guideline. “UNDER REVIEW” “My Government intends to apply the principles of the legislation to the State services and is discussing their application with the .State service staff organisations,” Sir Arthur Porritt said. “It is the view of my Ministers that this legislation is necessary to deal with the exceptional situation that prevails. It is their intention lo keep the legislation under review, in the light of changing circumstances,” he said.

“Honourable members would be aware of the reasons which have prompted his Government to convene Parliament early in the year. The escalation in costs and prices had very serious implications for New Zealand as a whole, its effect on the pastoral industries—which earn most of the country’s export income—being particularly serious.

“It is clear that the economy cannot withstand a ■continuation of wage and price increases of the order experienced in 1970,” Sir Arthur Porritt said.

“My Government has placed the highest priority on employers and employees ; agreeing voluntarily to a nro- • gramme which would en~"re greater economic stability

this year. My Ministers have consulted at some length with both parties to facilitate an agreement Substantial progress was made in these consultations, but my Government has concluded that the situation requires further action. “Legislation will, therefore, be introduced early in the session to give effect to the stabilisation measures already announced by my Minister of Labour.” TERMS OF TRADE Throughout 1970, New Zealand’s foreign-exchange resources had been maintained at satisfactory levels, Sir Arthur Porritt said. The current account of overseas transactions for the last 12 months had recorded a deficit, but this had been more than offset by an inflow of private capital. The terms of trade had continued to deteriorate as, over-all, the prices of New Zealand’s main exports had remained stable while prices for imports had continued to rise relatively quickly. Leaving aside the special situation that existed during World War n, the terms of trade were at their lowest level since the world depression of the 19305.

“My Ministers believe that this deterioration in the terms of trade is a direct result of the failure of the nations of the world to abide by accepted principles of international trade, especially those embodied in the General Agreement on Tariffs and Trade,” Sir Arthur Porritt said. “While trade in industrial products is conducted relatively freely, international trade in agricultural products is subject to barriers and restrictions which unfairly impede the economic development of those countries dependent on the export of primary products. N.Z. AND E.E.C. "My Government will continue to place emphasis on bilateral and multi-lateral negotiations aimed at eliminating these barriers, and on moves to widen international arrangements for the orderly marketing of primary pro- . ducts,” he said.

The problem of the terms of trade assumed special significance when viewed in the context of the threat to New Zealand’s rights of access to the United Kingdom market.

“The protection of New Zealand’s vital interests in the negotiations which Britain is now undertaking with

the European Economic Community will be a continuing major object of my Government this year,” said Sir Arthur Porritt “Discussions are under way about the provisions needed to ensure the continuity of New Zealand’s exports of butter, cheese, and lamb should Britain become a member of the Community. “The British Government has made it clear that in terms of the assurances which it has extended to New Zealand, it is determined to ensure that the appropriate safeguards are provided. MAJOR TASK “My Ministers have presented New Zealand’s case to the Governments of the Community. The special nature of New Zealand's problems is now familiar to all parties in the negotiations. The formulation of detailed solutions to these problems will be a major task in the coming months.”

His Government, said Sir Arthur Porritt, was greatly concerned with the effect of increases in farmers’ costs—because such increases could not be recovered from export market sales. This has meant a fall in the farmer’s net income, and consequently a drop in the amount he was able to reinvest in farm development. This, in turn, would result in a slowingdown in the rate of growth which must impair New Zealand’s ability to attain the National Development Conference production targets. A detailed examination of the economic position of farming had been undertaken last year by the Agricultural Production Council, which had been most helpful in framing the measures in the 1970 Budget designed to assist farming. The production council was bringing up-to-date the material, in this survey and intended making further recommendations to the Government.

“My Government’s basic objects—which are shared by the farming community—are to help to ensure that farming remains a viable business, yet able to adapt itself to changing circumstances,” Sir Arthur Porritt said. WATERFRONT, SHIPPING “My Government desires to promote good industrial relations in the waterfront industry, and to improve cargo handling efficiency and the co-ordination of port activities,” Sir Arthur Porritt said. “You will be asked to consider a bill to amend the

Waterfront Industry Act, 1953. This will provide for a New Zealand Waterfront Industry Board, and port industry boards representative of all waterfront employers’ and workers’ organisations to carry out the legislative functions which are the present responsibility of the Waterfront Industry Commission and the port conciliation committees.

"It will also provide for the legislative and judicial functions of the Waterfront Industry Tribunal to be extended to apply to other employers and workers on the waterfront.”

The Government recognised that the increasing growth of population and industry increased the dangers of pollution of the environment Its policy was to review and strengthen control measures where this was necessary. “Administration of water pollution control has been transferred to the Minister of Works so that better coordination with the administration of water resources generally may be achieved,” Sir Arthur Porritt said. “A Board of Health committee recently reported on the need for revised legislation on air pollution, and it is proposed to submit for your consideration an Air Conservation Bill, which, it is anticipated, will provide adequate statutory power to meet the needs of the future.” The report of the Royal Commission on horse racing, trotting, and dog racing was being studied by the Government, and the House would be asked to consider a new racing bill. DEFENCE BIIL Provision for the defence and national security of New Zealand remained a fundamental obligation, calling for long-term planning but with due regard for what was economically feasible for a country of its size. Despite the need to accept restraints in all areas of Government activity, New Zealand has assured its allies that it idtended to honour its obligations, although the character of commitments might change from time to time. In seeking a modem and efficient form of defence organisation, tailored to New Zealand needs, the Government intended to introduce this session two comprehensive bills, a defence bill, and the Armed Forces Discipline Bill, which would consolidate last year’s far-reaching reorganisation of defence machinery.