Comment from the Capital

Press, 2 July 1979, Page 16

Comment from the Capital

out of the last Cabinet appointments because of electoral uncertainties over the Kapiti seat, is now Parliamentary Undersecretary for Energy. Messrs Quigley, McLay and Cooper had much influence on Budget planning. Mr Quigley, as Associate Minister of Finance, is also a member of the New Zealand Planning Council, through which channel he would have access to valuable economic and monetary information which would relate to Budget planning. Also of great value at Cabinet level in Budget planning would be Messrs H. C. Templeton, J. B. Bolger, and W. F. Birch.

The calibre and special talents of these younger men are often forgotten when people, even politicians, discuss Mr Muldoon and his Cabinet. It is assumed that whatever help he has comes from Messrs B. E. Taiboys, D. Maclntyre, L. R. AdamsSchneider, D. S. Thomson, T. F. Gill and G. F. Gair. This is true, of course, but .only in relation to their own special spheres. The view remains that the

new ideas embodied in the Budget came largely from Messrs Quigley, McLay and Cooper, plus the experts of the Planning Council. This confirms it as the first of a “new deal,” stressing for the first time in a Budget the need for organised economic growth. Close to the beginning of Mr Muldoon’s Budget speech, following the usual quick glance at the international situation, is a section headlined “laying the basis for future growth.” In it Mr Muldoon said:

“If the economy is to provide sufficient employment opportunities we must expand export production and reduce our dependence on imports where this can be done without unduly increasing production costs.” There have been some doubts about Mr Muldoon’s complete acceptance of aspects of the “growth strategy” he spells out. To many, however, the remarkable fact is that he finally got down to do something that had been hinted at for so long. It is tenable that Mr Muldoon was finally pushed into action by feel-

ings within the National Party.

Last year there was an unsuccessful attempt by some National Party members to persuade Mr Muldoon to promote a “growth strategy.” He was unsympathetic then, probably because in his view the time was not appropriate. A detailed “growth strategy” would presuppose, for its success, a stable economic environment.

Now he has accepted leadership in the new strategy, he has insisted on. and has obtained, some of his own conditions. One of these is the adoption of a flexible exchange-rate setting policy. Few specialists would argue against this one, which basically means that New Zealand is falling into line with most other developed countries.

There could be some unpleasantness in store for New Zealanders in this flexible rate policy. Imports will be helped along by alterations to the exchange rate, as has happened in Australia in recent years, rather than by increasing subsidies. This