Socred policy on exports

Press, 25 November 1981, Page 33

Socred policy on exports

PA Wellington The Social Credit leader (Mr Beetham) has questioned the need for New Zealand to rely heavily on exports and on' policies' that give producers long-term dependence on subsidies. In an address announcing economic policies, Mr Beetham told the Manufacturers’ Federation that he also wondered whether energy and capital-intensive projects would ever achieve the growth this country wanted. Mr Beetham asked whether the whole thrust of the Government’s economic policies needed to be dominated as much as had been the case by the need to export. He said. “We must question whether our growth strategy should be based as firmly as seems currently to be the case, on a relative handful of energy-intensive and capital-intensive projects, and whether such energy and capital-intensive projects will even achieve the growth we want.” Mr Beetham said his party offered a total economic package built on encouraging as many New Zealanders as possible to expand output and extend effort. “We have got to return to an economy based on worthwhile returns and profitability, and turn away from policies that subsidise our producers into long-term dependence. “For that reason, we have expressed our intention of replacing export incentives with lower personal and company tax scales and access to low cost working and investment capital, as incentives to produce. “As such, of course, these incentives would be available for import replacement as well as encouragement of exports.” Mr Beetham later said the

reality was that the New Zealand producing sector needed insulation from unfair competition in a world market where “our own primary produce is denied free access in so many quarters.” “If the New Zealand economy is to continue to benefit from world trade, it will be necessary — for the foreseeable future at least — to provide its producers with a measure of protection. “For that reason, Social Credit is committed to achieving a realistic exchange rate and to the continued use of tariffs." On closer economic relations with' Australia, Mr Beetham said Social Credit welcomed some of the possibilities C.E.R. would allow, but felt New Zealand- must adopt a cautious approach. “If we are to enjoy the benefits of increasing production based on further processing of our primary products from the agricultural area, then it is imperative that we do not prematurely expose our manufacturing and processing sectors to the existing advantages enjoyed by Australian firms. “Australia has been involved in manufacturing as a major concern for considerably longer than has New Zealand, and in addition enjoys a far stronger home market underpinning of its second industries. “To beat inflation New Zealand has to place the primary emphasis on diversified, broadly based growth within a vigorous economy that is regionally dispersed and involving further processing and manufacturing from our natural resources and the products of - our primary industries.” Only this sort of approach is going to remove the wasteful burden that unem-

ployment has become, Mr Beetham said. It would also provide the increase in total output from which will come the resources needed to support both a rising standard of living and traditional welfare and social spending programmes. Mr Beetham said Social Credit's reform policies to remove inflation were: © Credit reform policies, to ensure the financial sector remains in balance with the total economy and channels low cost capital to productive enterprise. © Energy policies, that reduce our dependence on imported oil without requiring massive investment of expensive foreign capital, © Tax reform policies, “proposition 28,” involving a flat rate of standard tax to eliminate fiscal drag and encourage greater effort while discouraging excess expenditure with an expenditure tax. © Investment policies, involving tax deductibility and inflation-proofing of savings, to encourage savings and discourage speculation in capital assets, thus making those funds available for investment in increased production. ® Business policies, which, by restoring incentive to both effort and investment, will provide job opportunities that will both remove the burden of unemployment relief and markedly increase national income. They would provide a broader taxable base enabling the tax cut policy to be sustained without increasing government deficits, thereby taking further inflationary pressure off the finance market. @ Stabilisation policies, mainly subsidies on essential consumer items until the other anti-inflation measures begin to have effect.