Govt warned on restructuring

Press, 21 July 1980, Page 4

Govt warned on restructuring

PA Wellington Grave and irreparable damage will be done to the fabric of manufacturing if the Government moves hastily on industrial restructuring, according to the president of the New Zealand Manufacturers’ Federation (Mr L. H. Stevens).

Mr Stevens said that the industry. studies programme and restructuring were discussed at length during last week’s meeting of the federation’s council. ?‘The federation is implacably opposed to precipitate moves to restructure manufacturing through Government intervention,” he said. “It lis clear that market forces themselves are bringing about the rationalisation and restructuring of most industries to a much greater extent than most people realise. A static population and weak consumer demand are forcing firms to find ways of becoming more efficient and competitive. “Second, it is also clear that the economy could be heading downwards — perhaps more rapidly than the Government is aware. The situation calls for extreme caution. Resources discarded by any further rationalisation in the near future are unlikely to be reabsorbed by industry because the growth simply is not there.

“While the federation believes the Prime Minister (Mr Muldoon) and the Minister of Trade and Industry, (Mr Adams-Schneider) have a' very realistic grasp of the situation, it is clear that some public officials, economists, and commentators are so preoccupied with their theories that they overlook the horrendous employment and social implications of their ideas. “We believe the timetable imposed on the industry studies programme has overstretched resources of those departments involved and that quality has suffered as a result. Judgments/based on inadequate research . or errors in matters of fact will not lead to restructuring in the country’s best interests.” Mr Stevens said he wanted to make it absolutSly clear that manufacturers accepted the need to stepup productivity and the export drive. . “Our research shows that the present upward, export thrust can be maintained provided the domestic base of industry is not eroded

through the application of free trade theories that have limited relevance to a small, isolated country such as New Zealand with its large agricultural base,” he said. “But the manufacturing community strongly resents being singled out for restructuring by officialdom and in public through the Industries Development Commission while other sectors are apparently left alone.. “The whole distribution system could well be examined in public by an I.D.C. type inquiry to see whether it provides the most efficient service to manufacturers and the consumer. Why not a similar inquiry into the governmental structure, including trading departments? “Let these organisations also present their development plans to a commission, as manufacturers are having to do, and be crossexamined by interested parties,” said Mr Stevens. “If it is to be effective, the restructuring process must be carried out across the board.”