P.M. denies projects will be ‘crowded out’

Press, 19 November 1981, Page 13

P.M. denies projects will be ‘crowded out’

PA Wellington The Prime Minister (Mr Muldoon) has denied that the big energy sector projects in the National Party growth strategy will crowd, out other economic development. A computer study of the “think big” projects was looking at the most extreme possibilities of. the effects on other developments, he said. “These computer model things go on all the time, but there is a wide range between the best case and the worst case.” he said. The computer study had “no relevance” to the argument between Mr Muldoon and the Labour Leader (Mr Rowling) who has cited secret Treasury reports as saying the three key elements of the energy sector cannot go ahead simultaneously. There was no question about the financing of the big projects — the syn-gas plant in Taranaki, the Aramoana aluminium smelter, and the New Zealand Steel expansion — Mr Muldoon said. The study was of more relevance to the question of what sort of drain the three projects would place on manpower resources. Mr Muldoon said earlier that if insufficient skills were available in New Zealand, skilled

migrants would be invited, as a last resort, and some construction could be done outside New Zealand. The computer study was “of some value and some relevance.” But Mr Muldoon said... “This is not in the mainstream of Treasury advice to the Government.” Later, Mr Muldoon said the newspaper reports arising from the computer study were “inaccurate” and had reached conclusions which could not be substantiated. • The computer study being conducted by the Treasury using a Victoria University “model” of the economy had still not been finalised. “I have been advised by the Treasury that no resulsts are available as there are problems with the. analyses which still have to be resolved. The results of these methods are only as good as the assumptions that are used. This model takes account of only some aspects. For example, it does not take adequate account of overseas borrowing,” he said. “The Treasury’s advice to the Government is based on a wide range of considerations going well beyond studies of this kind/’