COMMERCIAL' Business confidence must be restored'

Press, Volume CXV, Issue 34022, 11 December 1975, Page 22

COMMERCIAL' Business confidence must be restored'

GVeia Zealand Press Association) —" DUNEDIN. Among the many challenges facing the new National Government; was the need to recreate a climate of confidence in the future prosperity of the economy, the chairman of the Dunedin Stock Exchange (Mr H. R. Wilson) said yesterday in his address to the annual meeting of the exchange.

“The need is now vital and urgent for the investment pendulum to swing back towards funding byequity issues.” he said. Bureaucratic policies applied by the Labour Government to health, education, transport and commerce, had sparked off a reaction against "the cult of centralism” from all sectors of the communitv, Mr Wilson .aid. “For the second time tn •20 xears the people of New Zealand, having handed the ' helm of Government to socialism, after three years ; decisively withdrew that -mandate to govern. _

“1 have watched with real ‘sympathy the struggles oft companies, as they have’ endeavoured to cope with! the plethora of controls and restraints inundating them. “That some have sue-, ceeded in maintaining their' earning rates is a remarkable achievement, however,for others the stark reality ■of escalating costs and falling demand has caused severe falls in profitability.’ Mr Wilson said there had -been a remarkable expansion; : in company borrowings during the last 18 months, and that in many cases the capital base was insufficient to, support further borrowing. He said there w r as an urgent need of funding by equity issues. “It is quite certain that among the challenges facing the new administration not the least is the need to recreate a climate ofi confidence in the future prosperity of our economy,) so that investors will again ■ assess risks and rewards,; and will be encouraged to come forward to support equity investment. “During the last three years there has been a risk lof Government edicts which; have conspired to undermine ■ business confidence.” ; Mr Wilson said the impie-) ; mentation of the absorptive Sugar bid by A.S.C. I The Adelaide Steamship; ■Company, Ltd, is making a ($A4m take-over offer for the iMoreton Central Sugar Mill 'Company, Ltd. one of the ;smallest sugar mill groups in ' Australia. The cash offer of 1390 c a share for each of the 11,020,000 issued shares is ‘equal to the share market’s highest level for the com'pany’s shares this year. It is also above the net tangible asset backing of 339 c a share Woodsreef improves Woodsreef Mines. Ltd, ; asbestos miner, almost broke (even in the last three months lof the year to October 31. (when the trading loss was a mere 5A6921. The trading loss )for the year was reduced from $5.3m to $2.7m, of jwhich -$2.3m was incurred in (the first six months.

capacity policy had enabled) I the wasteful and inefficient- ) companies to recover cost (increases. “The total dedication of (the Government to their ideal of full employment had ; the completely unsatisfactory result of inhibiting the -movement of labour from declining to expanding industries.” “The nation was thus deprived of one of the few benefits which we- might otherwise have derived from economic recession.” He added that there were some “particularly obnoxious” provisions in the; Labour government’s Commerce Act. “If an early indication is given by the Government of an intention to rectify matters such as these, much will be achieved towards restoring the belief in the concept "effort brings reward,” )he said.