Commercial High Commissioner defends economy

Press, 2 April 1979, Page 25

Commercial High Commissioner defends economy

NZPA Sydney The New Zealand High Commissioner in Australia (Mr L. J. Francis) has defended the state of New Zealand’s economy in a letter to the “Australian Financial Review” newspaper. The “Financial Review” last week ran a series of three articles which reviewed New Zealand’s economic crisis and Aus-tralia-New Zealand relations. The newspaper also commented editorially. In a 700-word letter, Mr Francis said that the economic difficulties faced by New' Zealand were not as severe as portrayed by Christopher Jay in his two articles. He said that the balance of payments problem, caused by soaring payments on invisibles (a probl m shared by Australia) and which disguised a favourable recovery in the balance of trade, had improved. Mr Francis also took issue with Mr Jay’s assertion that inflation in New Zealand was getting out of control, and said that the trend was downwards. The letter disputed Mr Jay’s assertion that there was a paralysis of will among New Zealand’s political decision-makers, giving the removal of price controls and changes in the foreign investment regulations as examples of recent action taken by the Prime Minister (Mr Muldoon). Mr Francis also drew attention to the successful efforts which New' Zealand had made in finding alternative markets since Britain entered the European Economic Community. He said he believed no other Western country had

faced' such a dramatic turnabout in trade, reflecting entirely external factors, in recent years. “I cannot see that if other countries had to face such circumstances they could have adjusted better than has New Zealand,” Mr Francis wrote. He also said that Mr Jay’s suggestion that New Zealand’s present attempts to limit fuel consumption illustrated “an underlying malaise” was nonsense. Mr Francis said he had no quarrel with the overall theme of the third article in which Robert Haupt described the relationship between the two countries, specifically on trade, as a very important and sensitive issue for both Wellington and Canberra. But he said that a wider

examination into the total economic relationship would show a much greater economic significance of New Zealand to Australia, and viceversa. “Mr Haupt is unduly pessimistic when he suggests that New Zealand’s economy makes concessions from our side improbable,” he wrote. “New Zealand had, and will continue to make trade concessions when these are balanced and complementary.” Mr Francis said New Zealand’s economic future would be shaped by many factors, but no assessment of its prospects would be complete without expanded references to the role that its surpluses of low-cost power and natural gas would play.