Deficit ‘frightening,’ says Sir John

Press, 5 June 1982, Page 11

Deficit ‘frightening,’ says Sir John

NZPA Hong Kong The level of New Zealand's overseas deficit was frightening, a former Prime Minister. Sir John Marshall, has told the New Zealand-Hong Kong Business Association, in Hong Kong. Sir John, who was Prime Minister for a short time in 1972 and the Leader of the Opposition in 1973-74. is now a company director. He was in Hong Kong on a business trip. After giving an audience of 50 a "realistic and optimistic" view of New Zealand's future. Sir John said “The present state of the New Zealand economy, if

you take a realistic view, is not quite so optimistic." New Zealand was sharing the recession of its trade partners and with some exceptions was not doing as well as most of them. "I think we can say unemployment in New Zealand is at a lower level in proportion to most of the O.E.C.D. countries, but then on the other hand inflation is higher." he said. "Although some people are optimistic • about inflation coming down a bit toward the end of this year, the general view is that inflation will be 16 per cent at least, possibly more." he said. Sir John said that on cur-

rent account New Zealand’s overseas deficit was $1440 million, with an $B2O million trade surplus more than accounted for by a deficit, on invisible transactions, of almost $2300 million. As a result New Zealand was borrowing very heavily. "In simple terms, we have been living beyond our means for the last nine years." said Sir John. Earlier, he had emphasised the disruptive effect that the oil crisis had had on the New Zealand economy. “It took the oil shock nine years ago to realise how we had taken . things for granted." he said.