Message clear: agriculture not enough, Minister says

Press, 26 July 1976, Page 2

Message clear: agriculture not enough, Minister says

From CEDRIC MENTIPLAY

Rotorua A vision of New Zealand going into the twenty-first century as a manufacturing and exporting country without complete dependence on agriculture was conjured up for delegates at the annua! conference of the National Party by the Deputy Prime Minister and Minister of National Development (Mr Talboys). His paper, "New Zealand in the last quarter of the twentieth century," generated lively debate on Saturday and left delegates with at least some idea of how the times are changing. Mr Taiboys saw three main challenges as determining the kind of society New Zealand will shape over the next quarter-century. “A work force which is rapidly increasing in numbers and skills. It will have about doubled by the end of the century. We will have to

create twice as many jobs as we now have. This new workforce will not be content with just any job. It will be highly educated. Many more will be women.”

Second, there was the challenge posed by the rapidlyrising costs of New Zealand’s social services, good medical and educational care, good roads and communications, and defence. The price of all the benefits New Zealand would want in its expanding society was going up at a dizzying rate. "The third challenge is the universally declining profitability of agriculture,” Mr Taiboys said. “It is the mainstay of our economy. It will remain so into the next century. But the figures for world trade over the last 15 years make it gloomily clear that commodity profits have been stagnant or declining. This decline has dragged down our relative national wealth. Twenty-five years ago, we enjoyed a per capita income which was the fourth or fifth highest in the world. Our standing is now sixteenth, and still falling. "The message is clear —

agriculture is not enough," said Mr Taiboys. "Looking at these challenges, some very intelligent and well-informed people have become pessimistic about our long-term prospects,” he said. “I am not one of the pessimists. But I am a realist and I say this: if we run away from the challenges, and leave these underlying trends in our economy the way they are, the pessimists will be proved right.” Mr Taiboys saw New Zealand as at an economic turn-ing-point, “perhaps the most important since the ship Dunedin sailed in 1882 with the first cargo of frozen meat. Almost a century of growth based on agriculture is now irreversably slowing down. The white wings of a new Dunedin are not going to waft us to economic prosperity. We are going to have to walk there.” His answer is for New Zealand to develop a pattern of export-led growth, without which New Zealand would be condemned for years to come to the dreary cycle of balance-of-payments

crises. The economy cannot accelerate smoothly with constant stop-go signals. New Zealand could no longer cut back significantly on imports without also cutting back on future growth. "The real choice is not between producers of agricultural products and producers of manufactured products, but between those who export and those who do not,” said Mr Taiboys. ‘"That is where future governments will need to play favourites. “That is where our policy preferences will have to lie,” he said. "I hope that agricultural and pastoral industries and those other industries which are competitive and export-oriented will understand their common links. They have a natural interest in helping to get New Zealand on to the path of export-led growth.” Agriculture would remain the dominant export industry. By the end of the century, it would still be providing more than half of New Zealand’s export earnings. It was the most striking example of an industry that had taken on

international competition and beaten it. It was the most efficient and adaptable agriculture in the world. “Our present economic setbacks have at least made one thing perfectly clear—• a growing number of firms can no longer live solely in our small domestic market,” said Mr Taiboys. “For three or four decades, we have built up a manufacturing base behind protective barriers, substituting locally made goods for imports. It was expensive, but it did widen our economic base. “Now, the equation has changed. The benefits of import substitution are becoming less and less. The cost of being non-competitive is getting 'steeper and steeper. We have about come to the end of the road. There are not many goods left to substitute. The only course for those industries which want to go on growing is to shift from import substitution to export-led growth, from the comer shop to the international market place.”