N.Z. near ‘economic cannibalism

Press, 12 April 1980, Page 6

N.Z. near ‘economic cannibalism

PA Nelson New Zealand was on the brink of “a period of frenzied economic cannabalism” which would drastically change the balance and , resource structure of the business community, said the Leader of the Opposition (Mr Rowling) ■last, evening. ‘'y,.' Opening the conference. of the Printing Industries -Federation, he criticised the increasing number of commer-i cial mergers and. take-overs I which.-hey said .were placing more "and'more' power* and! resources in fewer and{ fewer hands. ; 'Mr Rowling acknowledged. l

there was a place for some) large enterprises, and for genuine rationalisation and economies of scale. But he said a small economy like New Zealand could not tolerate a situation where genuine competition was increasingly strangled, and where monopoly or cartel control of key resources was used to stamp out smaller businesses -down the line. ‘‘We cannot • afford the luxury of board-room ego trips which ultimately! fit neither shareholder-; nor ■the '.general public,”, he said. Some of the responsibility to fight against this trend lay with the business community itself, he said. SmaN

ler units in particular had to be a lot more-willing to get together and use their collective and co-operative strengths to offset the impact of big organisations. There also needed to be a substantial overhaul of the commercial law of the country, which in practice was proving’both “toothless and gutless.” Mr Rowling said a Labour government would put considerable emphasis on stimulating and assisting small businesses throughout ■■ the country—where, • the. - “heart of New Zealand’s future industrial and commercial development musx lie.” He, was;

convinced that, as part of a programme to stabilise and differentiate in the money market, a special position had to be created for the smaller business. Lack of assets and a greater element of risk should not be allowed to cut off the individual, or small group, from investment capital. The best use of public money, in industrial development, did not come through a. system of handouts, disguised as incentives, but through the provision of reasonably priced investment finance.' The State’must be prepared to help with the technical, commercial and market expertise that small

companies often desperately needed.

“The country is littered with businesses that have collapsed because people simply hadn’t a clue what they were getting into,” he said. “Everyone has the right to make their own mistakes. But we cannot, as a nation, afford too many of them. We are all affected by the other fellow’s efficiency—or lack of it.” While it was not the role of a government to put its oar into the affairs of small business-.there was a need both to extend and improve the range and availability of expert business advice.