Resigned to inflation

Press, 9 October 1979, Page 20

Resigned to inflation

< If New Zealand inflation (continues at a 10 per cent (rate the 1970 dollar will be ■ worth 20c in 1985 and 10c i in 1992. says Mr R. R. Hudijson. chairman , of Donald (Reid. Otago Farmers, Ltd, in • his annual review. ; “We are still living with ’(inflationary pressures and the Government appears to be ;( resigned to this situation I'continuing.” Mr Hudson says. ■ “We must plan accordingly.” >: While he does not say what those plans are he ex- ■: presses pessimism about the • outlook for the private sector. Even record turnover tup • 32 per cent on 1978) and record after-tax profit (up 42 per cent) fail to'gain his en■thusiasm because they are! stated in depreciated money.: “The 1979 Budget again in-'

i. creased the Government's! t|appropriation of the gross ? national product, and Govilernment expenditure is now -ISI4OM a week,” be pointed! 1 out. i Current value of all New! Zealand companies listed on! aj the stock exchanges is about 5 $2.1 billion, about 15 weeks" Government expenditure. i i Net farm income as a per-; . centage of national income! has steadily decreased, from. ■ 17.6 per cent in 1952-53 to! - 7.7 per cent in 1977-78, and! ?|is still falling, Mr Hudson j •Isays. There is also the question! >lof double taxation of divi-j -Idends. 1! "Do you wonder why the; ■ i Reserve Bank share price ini’dex in December. 1978. was! .137 per cent of the index in; ■’December, 1960, after being"

'adjusted for inflation." Mr Hudson asks. A shareholder in N.Z. Forest Products received, on average. $163. and the averl age employee received !$11,691. i "Many reasons can be given for the fall in the standard of living relative to other countries but it is suggested that the major reason iis that the rewards of private • enterprise and investment lhave been eroded to the i point that many people dejcide the risks are not worth while and it is more rewarding to be employed by the | Government or its equivalent.” Having said this Mr Hudson adds that prospects for farmer clients this year are for reasonable prices, and that the company's performance will reflect market conditions.