A share in Tasman

Press, Volume CXIV, Issue 33451, 5 February 1974, Page 12

A share in Tasman

The Government’s repatriation to New Zealand of the 1/ per cent interest in the Tasman Pulp and Paper Company, Ltd, sold by the Bowater Paper Corporation of Britain is in accord with its policy of reducing foreign ownership of important industries and resources. More than 50 per cent of Tasman shares are now held in New Zealand, although there are still substantial English and Australian interests m the company. Tlie disposal of the Bowater shares gives less cause for satisfaction. One large New Zealand company—Fletcher Holdings, Ltd, which bought a third ifrf the Bowater shares —now owns substantially more of Tasman than all other smaller New Zealand investors together. The Government, by retaining the nsmainder of the Bowater shares, has become the largest partner in Tasman. While there was a strong; case for Government participation in the company when it first set out to produce pulp and paper in New Zealand —just as there was a strong case for the participation of experienced paper companies from abroad—the strength of the company, the liveliness of the international market for raewsprint, and the growing strength and sophistication of the New Zealand share market, suggest that small New Zealand investors deserve a greater opportunity to participate in a growing industry. Perhaps the Government has decided, not unreasonably, that this was not a good time to place on the open market shares worth some Sl6m all at once. The Government should find a later opportunity to give up—or at least reduce—its holding and encourage further the widespread ownership which is creating a kind of “democratic “capitalism” among thousands of small New Zealand investors. increasing State ownership of the Tasman company might appeal to some Government supporters as “ socialisation by stealth Those who accepit such a course should be aware of the risk inherient in State ownership or control of newsprint. In India, Ceylon, and parts of South-East Asia—to say nothing of the Communist block—State control of supplies of newsprint has become a subtle and very .effective form of censorship. Newspapers which criticise the Government find their supplies of newsprint reduced. The result is the lingering death of a free press. While there is no shred of evidence that the present Government or any imaginable alternative in New Zealand might follow such a coursie. no government can bind its successors. The sale of the Bowater holding might reduce New Zealand's access to that company's considerable international marketing organisation, even though it will continue to act as Tasman's overseas selling agent., In the short run this will not matter while the wtorld shortage of newsprint lasts. The greater Government interest in Tasman might even strengthen the company’s position in the Australian market when newsprint arrangements under N.A.F2T.A. are beig renegotiated between the Australian and New Zealand Governments, But many newsprint producers—Tasman among them—are striving to increase capacity. A world surplus of newsprint in a few years is quite conceivable. Tasman will thvn need all the export contracts it can muster.