Fear that year’s inflation may reach 10 p.c.

Press, Volume CXI, Issue 32737, 14 October 1971, Page 3

Fear that year’s inflation may reach 10 p.c.

(New Zealand Press Association) WELLINGTON, October 13. Unless there was a marked reduction in the recent rates of inflation, all sectors of the economy would be in serious trouble, said the chairman of the Meat Board (Sir John Ormond) in a letter put before the National Development Council today.

“The farming industry is feeling the problems very acutely,” he said. “Overseas prices of lamb are not so low. but the return to the farmers is being greatly reduced because of increased costs.” Sir John Ormond was optimistic that overseas lamb prices would increase, but he said he doubted whether the increase would be sufficient to cover increased costs. The rate of inflation in the last fiscal year was 10 per cent and the Institute of Economic Research expected a further 10 per cent for the year ending March 31, 1972.

Sir John Ormond said the figure might be a little less than 10 per cent, but was well above a level which export industries J could" live with. “Unless a really serious attempt is made to deal with this problem, the whole target exercise must become increasingly meaningless and the economic future of New Zealand placed in serious jeopardy,” he said. Labour disputes in the key

industries had seriously affected New Zealand farming, said the chairman of the Agricultural Production Council (the Minister of Agriculture, Mr Carter) in a report to the national council. Industrial stoppages in the processing industries affected processing charges and this reduced the price which the farmer received for his product. Similarly, transport disputes usually resulted in increased freight charges, again reducing the net return to farmers. Delivery delays caused by stoppages might prejudice the retention of markets, said the report. Stability in the freezing industry would enable the producer to increase his stocking rate with confidence arising from knowing that when slaughter was necessary the freezing works would be able to handle his livestock. TRADE BARRIERS “Processing of primary products to a greater depth could be helpful in increasing export returns and in improving the terms of trade for agricultural products,” said the report. While such a development

was desirable, it would also create a number of problems. As a rule, trade barriers were imposed by importing countries to a greater degree as the product was presented in a more finished form. The establishment of processing industries or the expansion of present facilities also involved competition for necessary capital and labour. The agricultural industry had the potential to increase its already massive contribution to New Zealand’s export income, the report said. Such expansion would involve the continued efficient use of the country’s scarce economic resources. It implied not only a continued high performance on the part of farmers but the adoption of economic and financial policies conducive to expansion. The National Development Council will hold a one-day consultation on exports,

growth and productivity with the chairmen of its 16 sector councils and representatives of major export interests on November 17. The Deputy Prime Minister (Mr Marshall) who is chairman of the N.D.C., said the meeting would have before it a report from the N.D.C. targets advisory group on prospects for export growth in the 19705. “The November meeting, which will focus on New Zealand’s future export performance, will be a forerunner to a larger two-day conference next March,” he said. NEW TARGETS The March conference would confirm new targets and consider in depth the importance of increased productivity in boosting the wellbeing of the country, including the special relevance of social, cultural, and environmental