New Zealanders ’realising economic plight’

Press, 9 May 1978, Page 2

New Zealanders ’realising economic plight’

New Zealanders are beginning to realise the economic problems besetting them, says Mr J. H. Gemmell, president of the Manufacturers’ Federation. Mr Gemmell was in Christchurch yesterday to seek the views of federation members on the economy, and to meet the Canterbury Manufacturers* Association council. Rising unemployment was one of many factors that were finally bringing home New Zealand’s plight to the average citizen, he said. Mr Gemmell was quoted recently as saying that New Zealand had dropped in 10 years from sixth to twenty- , fourth on a list of the: world's most prosperousl nations. He said yesterday! that he believed the downturn had “bottomed out." However, New Zealanders still had “champagne tastes”] without realising that they had only a “beer income,’” he said. The answer to this was not necessarily to. change the nations tastes, but to work harder to be able to afford them. “You can either surrender, lie back, say you’ve had' it — or you can get stuck in and increase your material wealth so you can afford more benefits,” Mr Gemmell said New- Zeland's social wel-' fare programme was one example of a taste for champagne. Mr Gemmell said. “'Foo many people look to. the Government to do every-: thing. We have to start! looking at how' we can do it ourselves." The federation thus advo-! cated a halt to increasing! levels of social welfare until' the country could afford' them. Mr Gemmell said it was! difficult to predict exactly t how fast New Zealand's!]

economy would recover. “By; far the largest influence on' this country is the world! scene.” he said. ‘That will have to improve ... but we! can do a lot to help it." , It was fortunate that world prices were beinning I to drop: “Now we must try 1 to make our prices rise.” The problem, he said, was! that New Zealand was an agricultural economy. However, New Zealand, manufacturers were realising 1 that the country could make! good profits by not com-i peting directly with the; major industries of larger! nations. “We are very good' i at small lots — items that are too big, or too small, or of very high quality. The | answer to our search for an ! industrial economy is to do what other countries are not doing.” Agriculture could be maintained at present levels, but future expansion should be diverted into manufacturing, ' using home-grown raw materials. Forestry was a good example. It was obvious that the cost of freight as a percentage of the value of raw’ material exported was much higher than as a percentage 1 of the value of manufactured: items. “That is very import-' ant for an isolated country such as New Zealand.' (Freight costs will always: count against us.” But they' could be minimised, Mr! Gemmell said.