Article on N.Z. growth 'damaging’

Press, 12 November 1981, Page 2

Article on N.Z. growth 'damaging’

PA Tauranga The Prime Minister (Mr Muldoon) has hit out . at a long article on the New Zealand growth strategy published in the London weekly, the “Economist.” The article (report, page 8), which was highly critical of the “think big” projects on which the National Party has based its electoral hopes, was full of factual inaccuracies, Mr Muldoon said. But Mr Muldoon said the article was damaging because it was carried in the highly respected newspaper. “I am very concerned,” he told journalists, “because the ‘Economist’ is read by' opinion leaders all over the world. An article with such a mass of factual errors unquestionably is damaging.” Mr Muldoon released the text of a letter he has written to the editor of the “Economist” correcting what he termed “a significant number of errors of fact.” “I will leave it to your readers to form their own conclusions as to the adequacy of your research and the reliability of your' conclusions,” the letter said. Mr Muldoon said the Government was working to dismantle excessive protectionism of the New Zealand economy. Repeating the message which has dominated his public meetings during the election campaign, he said the major energy-linked projects in the growth strategy "do not dominate New Zealand’s investment programme and they are not, and have not been presented as. substitutes for efficient, steady growth in the traditional areas.” Mr Muldoon said the Aramoana smelter had not been left without access to the necessary technology by the

Alusuisse withdrawal from the project. Fletcher-Challenge and Gove Aluminium expected to approach the Government with a new partner soon, he said. The delay in the syn-gas plant had been caused because Mobil was waiting until after the election to finalise the deal, but commercial and loan documentation was being completed “in the meantime” and a lead bank had been appointed for the financing. There had been no alteration in the project timetable. New Zealand was not paranoic about petrol supplies but shared “the general expectation of oil consumers that beyond the present oil glut further rises in real prices are. inevitable and that the world will continue to be vulnerable to major disruptions in supply.” The expanded New Zealand Steel mill would be competitive with other mills producing similar products and the success of the project did not “depend on export subsidies or on a tightly protected domestic market.” “New'Zealand’s balance-of-payments deficit may be increased in the short term by capital imports for the major projects but projected returns will make 'the investment well worth while,” Mr Muldoon said. There had been no difficulty in arranging finance for the projects. The vast bulk of New Zealand’s traditional exports did not receive export subsidies, he said. “The ‘think big’ projects are not based on assumptions as to the continuing availability of export incentives, and it is not expected that they will have a significant effect on the cost of these schemes,” Mr Muldoon said.