Market looking forward to austerity?

Press, Volume CXV, Issue 34021, 10 December 1975, Page 28

Market looking forward to austerity?

The sharemarket is likely to view favourably a reappraisal of the economy by the new National Government and its announcement of measures to come to grips with our economic problems.

This is the opinion of R. A. Jarden and Company, Wellington stockbrokers, expressed in an investment letter to clients. “Even if the measures are austere the sharemarket will probably see them as a sign that the economy is at last moving back into a more realistic and healthier shape," Jarden states. “What course of action will be pursued by the new Government, however, is still relatively unknown. The following points are likely to be covered in the short term: “Restore confidence to export industries, particu-| larly farming. A review of 1 the farming industry can be expected and further supports and subsidies could’ result. “Price and income con-

jtrols will be continued and lit is unlikely that the January I wage order will give a full i cost of living compensation. "A cut in company tax is likely to be instituted to boost the confidence of the corporate sector. “Various forms of import controls will be considered although there appears to be a limited scope for any major reduction in the account deficit. “The borrowing policy is likely, through necessity, to be continued.

I “A cut in the growth of 'Government spending. In (the short run there does not 'appear to be much room for a severe cutback in Government spending. i “Immigration will be drastically cut back and so reverse the shift in resources from productive to social investment.”