Mr Rowling predicts unhappy year ahead

Press, 30 December 1976, Page 4

Mr Rowling predicts unhappy year ahead

PA Wellington t The coming year would be * "a crunch year for New Zea-, land families.” said the Leader of the Opposition (Mr Rowling) yesterday in a New Year message. He predicted that 1977 would be "one of the most difficult years New Zealand has faced.” Mr Rowling called on the I Government to defer the; introduction of its superannuation scheme in its! present form, boost the purchasing power of the average earning family, exercise monetary control, increase productivity, and to develop a comprehensive energy policy. "It is clear that the hesitant fumbling policies attempted this year by tiie Government are a complete failure,” Mr Rowling said.

“What is needed are new approaches that will protect the stability and welfare of the family unit . . . while at rhe same time rebui'ding productivity and incentive into the New Zealand economy.

“We certainly cannot tolerate a further year of economic mismanagement which; throws away record export j earnings in an import snlurge | and traps the wage and salary earner through rising prices, tightly controlled wages, and a high level of taxation while throwing money away on an extravagant and socially unjust superannuation scheme.’’ said Mr Rowling. The ■mperannnation scheme, he said, should be deferred. In its present form, it would cost taxpayers an extra S3OOM in 1977 at a

time when social services were being heavily pruned. "Most of that money is

going to people who are already reasonably well off, while the elderly in real need will lose their special benefits. That extra money will have to come from extra taxation or be diverted from existing spending.” Steps should be taken to boost the purchasing power of the average wage and salary earner’s family, either by tax adjustments or by extensions and adjustments to the family benefit. "It is clear that these people are under very real pressure at the moment, especially in situations where the wife’is not working.” Mr Rowling said. As prices continued to rise and wages and employment opportunities were tightly controlled. this pressure would increase in the New Year.

Calling on the Government to revise its economic policies, Mr Rowling said that “proper and continuing control” should be established in the field of monetary policy. “The supply of money simply must not be allowed to outstrip production, and interest rates must be brought back from their present record levels,” he said. Productivity policies providing worth-while incentives for both the work-force and industry to drive for new export targets should be established. “New Zealand lives by exports yet we are facing declining productivity . . . [ funds for institutions involved in productivity techniques have been slashed this year, and investment discouraged by short-sighted financial moves.” Mr Rowling said. He attacked the Govern-

ment tor having no policy to reduce the use of imported oil. A comprehensive energy policy should be developed, giving New Zealand some independence from the moves of overseas oil producers.

“In spite of the effects that high oil prices have had on inflation and on the balance of payments, the Government has no policy to cut back on the use of imported oil,” Mr Rowling said. “In fact, by tying the price of local fuels to the price of imported oil and hiking domestic prices, the Government has wiped out any incentive for local industry to switch over to New Zealand fuels,” he said.

The battle against inflation had been “lost by default,” and rises in consumer prices had been “deliberately fuelled” by the Government to the extent of 4 to 5 per cent through huge increases in Government charges. “Next year inflation will be running at about the same level — probably higher,” Mr Rowling said. “The pricefreeze is ending with apparently nothing to replace it ... the effects of higher power charges will take effecr . . . higher oil prices will work through into the economy . . . the latest devaluation will take effect . . . and there will be at least a partly compensating general wage order which will have its own inflationary effect. “In all, 1977 will be one of the most difficult years New Zealand has faced, as high inflation and a stagnating economy clash with the .drive of the trade-union movement to restore the position of those they represent,” Mr Rowling said.