Govt measures on economy defended

Press, 25 May 1977, Page 6

Govt measures on economy defended

PA Wellington The state of the New Zealand economy, and the Measures taken by the National Government to improve it were the central points of the opening Address-in-Reply speech by the member of Parliament for New Plymouth (Mr A. P. Friedlander) last evening.

Mr Friedlander said that the rebuilding of the economy would be difficult and slow.

"However, this Government can recognise the problems, and has the strength to face up to them,” he said. On taking office 18 months ago the National Government was faced with four economic problems — a massive deficit in the Budget, a huge balance-of-payments deficit, a high and rapidly increasing rate of inflation, and a growth in unemployment. Mr Friedlander said. Attacks on the balance-of-payments deficit could create unemployment, measures to reduce the Budget deficit were likely to reduce inflation. but increase unemployment, and measures to; reduce unemployment could | increase the size of the! balance-of-pavments deficit, the Budget deficit, and inflation, he said.

For the first time since 1972 there had been a consistent slowing down in the rate of increase in the consumers price index, which meant that “for the first time since 1972 we are seeing a slow down in the annual rate of inflation,” Mr Friedlander said.

From the second half of last year the quarterly increases in prices had been declining. The facts showed a gradual improvement in the rate of inflation, which had fallen from 15.7 per cent under Labour to 13.7 per cent.

Next to inflation the large balance-of-payments deficit had been the cause of greatest concern. Mr Friedlander said.

By the end of 1975 the deficit had increased to

nearly SIOOOM, but after the first year of the National Government this had been reduced to less than S6OOM. The revival of manufactured exports had also required a considerable increase in imported raw materials to cause “the impressive expansion seen in that sector over the last 12 months,” he said. Turning to overseas trade, Mr Friedlander said that New Zealand was faced with the protectionist policies of the E.E.C.. inconsistent buying by Japan, and the strain on N.A.F.T.A. caused by unemployment in Australia.

Trade with Singapore was increasing at an annual rate of nearly 20 per cent, and the

joint venture with the Bahrein Government to establish harbour and storage facilities in that country would help expand New Zealand’s trade. The incentives now available to the farmer should be extended to the fishing industry, the seconder of the Address-in-Reply debate, Mr W. R. Austin (Nat., Awarua) said. In a speech covering aspects of Government planning and management, Mr Austin said that New Zealand’s fishing resources would increase greatly with the introduction of the 200mile economic zone, and young men would have to be encouraged to enter th industry.