“N.Z. to proceed on sound basis”

Press, 16 September 1976, Page 22

“N.Z. to proceed on sound basis”

Commercial

Mr Gerald Mansfield Niall is a Melbourne solicitor specialising in commercial law. He has been chairman of directors of National Mutual since 1965, and is a director of a number of other public and private companies in various fields — pastoral, mining, banking, telephone systems, and the car industry.

Mr Niall was educated at Melbourne Grammer School, and later studied at Cambridge, and is a Barrister-at-Law of the Middle Temple, London. He joined the Second A.I.F. during the Second World War, rising to the rank of Major, and served in campaigns in the Middle East and Borneo.

The substantial reductions now bein g made in Government expenditures in New Zealand and Australia should enable recoveries in the two countries to proceed on a sound basis, said Mr G. .VI. Niall, chairman of directors of the general board of the National Mutual Life Association.

Mr Niall and Mr R. L. Bienvenu. general manager of National Mutual are in New

Zealand to attend functions in honour of Mr G. D Stewart, chairman of the New

Zealand board of National Mutual, and Mr J .G. Souness, a fellow director, both of whom are retiring from the 1 New Zealand board on attaining retiring age.

In New Zealand, government expenditure had been reduced to an annual growth rate of 7 per cent compared with an average annual growth rate of 22 per cent, over the previous five years.! The combination of this cur-! tailment, along with sound; monetary management, had. already proved a successful! .'remedy for inflation in over-i seas economies such as the! ! United States. | Mr Niall forecast that asj ’the world economic recovery’! proceeded. New Zealand and i Australia would both be ! greatly assisted by the imI proving demand for commodity exports. However, it ! seemed likely, he said, that ■ unemployment in each country would fall only gradually. Before a substantial growth in output could occur, both countries would need to reduce the rate of increase in! prices and costs to that of! their major trading partners.!

Overseas successes in reducing inflation made this goal even more imperative, but also made the goal harder to achieve and neither country’s Budget strategy anticipated a rapid revival in economic ac-

i tivity. 1 Because the pace of the reI covery facing New Zealand I might be slow, there did ap- - pear to be some emerging problems for the raising of loan capital by companies, I said Mr Niall. Governments I; needed to be constantly aware of the possibility of (credit bottlenecks which may i abort or delay a recovery, i Large institutions such as the | life offices could be called I upon to provide funds as companies restructured their debt/equity ratios during the process of recovery in economic activity. The New Zealand Budget provision that insurance companies must hold at least 20 per cent of their investments in the housing and farming sectors meant that now more than 50 per cent of life offices’ funds ■were directed by the Govern- 1 . ment into specific invest- , Iments.

Mr Niall said that life! offices in particular would be! seeking the most efficient way' of mobilising the funds re-! quired and it was in this re-1 gard that the growing invest-! ment constraints on insurance! companies in Australia and New Zealand were to be deplored. If New Zealand was! to remain competitive on| world markets and sustain! sound recovery from the: economic malaise of the last half decade, every effort needed to be made to enable funds to flow freely through the financial and productive systems.