‘Sober’ year for all forecast

Press, Volume CXV, Issue 34027, 16 December 1975, Page 2

‘Sober’ year for all forecast

i (A’.Z. Press Association) WELLINGTON, December 15. “A very sober year for all of us” is the forecast for 1976 by the president of the Associated Chambers of Commerce (Mr A. Jolly). “During the next few days and weeks we can expect to take the first of our medicine as the new Government sets about administering its cure for economic ills.” said Mr Jolly yesterday. “The man in the street has recently demonstrated that he has an understanding of! basic economics, and he will prove receptive to positive measures which he understands. “The broad parameters of truth about our unbalanced national economy are now widely understood. I believe that 1976 will reveal that the greater part of the private, business sector parallels that .condition.” Recent company announce-1

ments, Mr Jolly said, had been frank and fearful, and had clearly demonstrated concern felt by business leaders. “Put very simply, cash profit. without which we have nothing, is in serious jeopardy.” Under present inflation 1976 promised “precious little” material gain and every prospect of deep trouble. The monitor of the country’s problems was inflation. Until it was under some sort of control business confidence. full employment, investment, growth, stability, and security would remain things known in happier times and not valued. Annual inflation of 15 per cent could not be accepted, said Mr Jolly. If this continued, then the prospects for all were quite frightening. LEADERSHIP TEST “One test of leadership will come when we see whether Government expenditure is allowed to continue at the current very high level of 40 per cent of gross national product.

V “I do not believe that the' 1: taxpayer is any longer pre--1 pared to relinquish sufficient s'of his earnings to finance spending. The alternative to - that level of Government ?,severe pruning is continued’ - borrowing and that feeds inflation which feeds on itself i anyway. S’ “Tens of thousands of j 1 small businessmen whom my 5 organisation represents are expecting significant Govern-: " ment restraint in the area • which the Government r directly controls. ’ “The existing financial distortions which are. strangling ’: business must be corrected. I r When they are, then funds will flow again into business, r investment for growth, jobs.. and productivity. GREED BLAMED 5 “Early in 1976 we must ■ find the national stamina to reject the greed which causes I inflation and to have an honr.est readiness to give value s for money.” e, Business would also be J ’ looking for relief from profit 1 control on the one hand ano, inflation-boosted'

profits" arising from inflationbased stock values. “Fundamentally, the only, money a government has comes from taxation . . . only profits can be taxed, and certainly not losses. When business achieves real and justified levels of profits the country will make the progress and achieve the social goals we all seek,” said Mr Jolly.