Chch businessmen, brokers agree with gloomy forecast

Press, 30 November 1978, Page 6

Chch businessmen, brokers agree with gloomy forecast

Christchurch economists, manufacturers, sharebrokers, and business representatives generally agree with the dire economic outlook given yesterday by Mr L. C. Bayliss, chief economist of the Bank of New Zealand.

Mr Bayliss predicted that the coming year would bring more emigration of skilled people from New Zealand — particularly to Australia — and higher unemployment, stagnant productivity, lower living standards, and a growing balance-of-payments deficit. A report of his address is printed on page 3. The president of the Canterbury Chamber of Commerce (Mr A. G. Williams) said that he basically agreed with Mr Bayliss.

“It is not the fault of one Government that we are in the position we are in,” he said, “but the fault of successive Governments.

“We have had enough of, this borrow-and-hope philosophy and subsidies are not going to be the answer.” Government expenditure must be cut and incentives must be created to increase productivity because free enterprise had been stifled by bureaucracy, Mr Williams said.

He predicted that not only would skilled labour leave New Zealand for more lucrative positions overseas — mainly in Australia — but that potential investors would also leave. If the Government would give the business community the opportunitv to make profits without excessive taxation, the situation would come right, Mr Williams said. The president of the Canterbury Manufacturers’ Association (Mr D. G. Saunders) said that something had to be done, and quickly ,to stop the outflow of skilled tradesmen overseas.

“Things are going to get worse before they get better,” he said. The vice-president of the Christchurch Stock Exchange (Mr J. M. T. Greene) commented that inspite of increases in killing and woolhandling charges, farm incomes appeared to be rising and many companies in the export business were doing well.

Nevertheless he empasised that he did not agree with previous statements made by

IMr Bayliss that a big devalu- [ ation of the New Zealand [ dollar was called for except lin the unlikely event that [wage increases could be [brought under control. [ “I fully realise the need for economic restructuring,” Mr Greene said, and added that he did not believe most people realised how serious the situation was. A University of Canterbury senior economist, Mr W. Rosenberg, last evening said he agreed with Mr Bayliss and said that one need only look, as an example, at the big imports of colour television sets into New Zealand and the consequent effect on the economy.

4 Mr Rosenberg said that the ,t too-high level of luxury ime ports had greatly affected the 1 balance of payments which ! r ] could only, at present, be 1 » overcome by increased overseas borrowing at steadily in- : creasing rates of interest. si “Living by borrowing is 1 [not practicable,” he said, v I “until such time as our ex- )■ [ports grow and our imports J) are lessened.” :sl Mr Rosenberg agreed that y! unemployment would inel crease and that, in the com-!-;ing year, New Zealand “will d .be struck with between 50,000 n;and 70,000 unemployed.” I 1 He also predicted a severe j:

recession in the United); States in the coming year. ' “People rationalise about ' unemployment, blaming the . unemployed, whereas the tin- ; employment situation is not , their fault,” Mr Rosenberg [ said. Many who had work were , quite well off, and could af-i. ford luxuries and contribu-j tions to the revenue of the I T.A.B. “We need more promise of; jobs here on a permanent; basis, and that is not easy) to accomplish,” Mr Rosenbergs said. I; “We need import controls)) [but the ones we have had) 1 I are not effective.”