Mini-budget next year ?

Press, 5 July 1978, Page 10

Mini-budget next year ?

PA Wellington The Government might be forced to bring down a minibudget next year, or a “tough Budget,” to counter the continuing and probably widening overseas balance-of-payments deficit. this is the opinion of Professor B. P. Philpott, McCarthy professor of economics at Victoria University, who addressed members of the Taranaki branch of the New Zealand Institute of Management. The Budget appeared to have said that the basic economic structuring problems were now sufficiently in line to allow the Government to expand the economy and move ahead, said Professor Philpott. But he doubted that

the assumption was justified. "The fact is that the Budget is a mildly expansionist document and will have a mildly expansionist effect,” he said. The tax decisions meant that the rise in incomes would be offset by the cut in rates and the Government would get only about the same amount in tax as in previous years. TBut, he said, the over-all effect of the budget was that unless the terms-of-trade figures rose, there would be a continuation of the overseas deficit and probably an increase. This could provoke a need for counter-measures next year, in the form of a mini-budget or a “tough 1979 Budget”