POLICIES BLAMED

Press, Volume CXV, Issue 33778, 26 February 1975, Page 2

POLICIES BLAMED

(N Z. Press Association! WELLINGTON, Feb. 25.

The Monetary and Economic Council’s report revealed the very serious problems facing the New Zealand economy, said the Acting Leader of the Opposition (Mr Taiboys) today.

“Inflation is still the major economic problem despite the growing balance-of-payments deficit and the recessionary trends apparent in the economy,” he said.

“With continuing inflation and fixed tax rates, the Government is taking an ever-increasing share from every wage increase.” The National Party had consistently advocated the revision of tax rates as the most effective means of

meeting the demands of cost inflation, Mr Taiboys said.

“The record current account deficit has been largely a result of an importing spree which, it is estimated by the council, will cost New Zealand $2280m in the year ending March, 1975. This is a 116 per cent increase on the 1972 import figure.”

A more effective policy designed to encourage a substantial increase in export based production was essential.

“The tight liquidity squeeze forced by the Labour Government and the general uncertainty in business has led to severe reductions in investment, leading to decreased production and employment

opportunities,” said Mr Taiboys. The Minister of Finance (Mr Tizard) said that the report was “a valuable contribution towards analysis of New Zealand’s economic situation. “The council’s concern with inflation, the balance of payments, the position of the farm sector, and the need for appropriate and timely demand management and income policies, parallel the Government’s own continuing emphasis in these areas,” said Mr Tizard.

But he said he did not think it appropriate at this stage to give detailed comment on the specific proposals of the report, which would be given careful consideration.