Economy on the brink—Labour

Press, 8 May 1980, Page 4

Economy on the brink—Labour

Parliamentary reporter The collapse of overseas markets for just one of New Zealand’s major exports would push the country over the “financial brink,” according to the Leader of the Opposition (Mr Rowling). “We have become increasingly and dangerously vulnerable,’’ he said yesterday, after a meeting of Labour’s shadow Cabinet. “The Prime Minister seems to be giving bland assurances to the country that the deficit in the current account is not too much to worry about.- In fact, it is the worst we have had for the last three years and is a worsening situation,” Mr Rowling said.

Very useful increases in export earnings over recent years had obscured what was really happening, particularly in the field of invisibles.

“The deficit on invisibles for the year ended March, 1976, was $420 million: the deficit on invisibles for this year was $1289 million. That has quadrupled' in that time. In fact, that deficit on the invisibles alone is more than the entire overseas borrowing of a Labour government in three years,” Mr Rowling said.

“If any one of the major export earners takes a nosedive, the economy is totally vulnerable. There is no way that we can escape extremely serious repercussions and the Prime Minister ought to front up to this and he ought to explain to the people of New Zealand exactly what the situation is,” he said. “It is not disastrous at the moment, but the implications are there that the price increases which

we have managed to secure in meat and wool and so on no longer can continue.” , Wool prices dropped 15C a kilogram on the Christchurch market last week, beef prices had declined visibly, and the country seemed to be in a new round of trouble oyer sheepmeats, Mr Rowling said. Overseas travel was one major item, but the other was Government borrowing. Mr Rowling said. , “Notwithstanding the fact that Mr Muldoon has had a huge increase in export earnings, he has continued to borrow right, left, and centre, continued to increase our dependence on overseas interests as opposed to New Zealand interests, and we have become increasingly and dangerously vulnerable. That does concern us,” Mr Rowling said.