Restructuring ‘not early enough’

Press, 6 September 1980, Page 6

Restructuring ‘not early enough’

PA Rotorua New Zealand should have embarked on its industry restructuring plans 10 or 20 years ago, the Deputy Minister of Finance (Mr Templeton) admitted last evening. It. was clear, with the benefit of hindsight, he said, that the programme should have started earlier. “But the periodic lifts in our terms of trade masked our problems and . reduced pressure for change,” he told the Textile and Garment Manufacturers’ conference. The. lack of growth in the economy over the last five years could be attributed to underlying structural weaknesses. However, in spite of slow • growth,. it was still better that industry be put on. a.'- mote competitive iind export-oriented footing, Mr Templeton said. . -. The Government has set out its view that a carefully managed programme over time can be undertaken in present circumstances to achieve * better economic structure and penhit faster

“While it is true that the domestic market is weak, many of our export markets — such as Japan, Australia and the Asean countries — continue to show positive growth rates. Partly as a result, export volume is also picking up,, enabling the total level of production to be maintained, in spite of the weak home market,” he said. Investment in New Zealand industry had not stopped, but had picked up with the improved returns in the farming and company sectors. Labour market turnover rates also remained Restructuring in . the textile industry would follow along the lines set out in the Industries Development Commission -plan, said Mr Templeton. "The growth areas identified in the plan represent about 80 per cent of total industry, activity. They include, for example* the entire woollen milling industry, for which - the Government has been prepared

to provide massive support.” Mr Templeton discounted suggestions that restructuring in manufacturing — particularly in terms of reform of the protective environment — was proceeding too quickly. “Yours is the only industry facing .a .changed long run environment, and the moves that’have, been made in textiles are 'cautious and gradual. The Government’s policy is to. proceed with care,, taking careful account of the capacity of' industry to sustain change. . “In my view the best thing that the Government can do for your industry is to hold to the course laid down in the .plan until the Commission reviews it in 1982?’

Mr Templeton. held. out little hope for manufacturers who were Opposed to . the gahnent .tendering scheme for imports. “This is being reviewed once;again, but I would hot wish to hold -out expectation of g change,” he said.