THE PRESS WEDNESDAY, AUGUST 31, 1977. The politics of “bankruptcy”

Press, 31 August 1977, Page 26

THE PRESS WEDNESDAY, AUGUST 31, 1977. The politics of “bankruptcy”

The Inder-Secretan for Trade and Industry. Mr Allen, was understandably imoatient with university students protesting about the reduced number of overseas students coming to new Zealand Hi* reply to questions raised at the annual conference of the New Zealand University Students’ Association, however, was less than diplomatic:

“Your association doe.* not seem to realise that New Zealand is nearlv

bankrupt, and the Government, in an endeavour to retrieve the situation has cut costs in every direction "

The Acting Prime Minister. Mr Taiboy* lost no time in denying that NewZealand was “nearly bankrupt." and promised to talk to Mr Allen about his statement. Mr Taiboys will probably tell Mr Allen that remarks directed at a student audience can have unfortunate repercussions when relayed by the media all over the country, and very likely abroad. Cabinet Ministers cannot indulge in the luxury of careless talk which tends to creep into any debater s language when he is provoked

While it is regrettably true that the New Zealand economy is still threatened by the twin dangers of inflation and substantial deficits in its overseas exchange transactions, the country is by no means “nearly bankrupt ” The International Monetary’ Fund and other lenders continue to provide New Zealand with the substantial loans needed to finance the imports that New Zealanders need or demand, and to repay earlier loans as they fall due New Zealand has an “AAA” rating among international lenders because this country has never failed to meet debt repayments when they were due and is basically capable of meeting its debts Even the gloomy report of the Organisation for Economic Co-operation and Development—which predicts an eightyear period of readjustment—does not suggest that New Zealand is a bad credit risk. Careless talk by New Zealanders in high places, however, may do more damage than the pessimistic, but soberly expressed, OECD. report.