‘Stifling of initiative’

Press, 8 July 1982, Page 4

‘Stifling of initiative’

Many New Zealand businesses were frustrated by Government policies which seemed intent on stifling initiative, said the president of the New Zealand Chamber of Commerce, Mr Allan Williams, yesterday. Mr Williams, during a luncheon address in Christchurch to the CanterburyWestland branch of the Society of Accountants, said that he had reservations about the wage-price .freeze and the Government's growth strategy.

Taking business development as his theme, he said that he was against Government controls and regulation in favour of allowing the economy to be guided by market forces.

Mr Williams denied taking sides in what he callfid "the Quigley-Muldoon debate.” The issue went far beyond personalities, he said.“It involves whether we are opting for a future of vibrant economic develop-

ment based on New Zealand resourcefulness or slow selfstrangulation under a system of controls and regulation.”

The wage-price freeze had come too late, and was fraught with dangers. It only alleviated the symptoms of inflation, and would only work if other steps were taken to deal with inflation's root causes, such as excessive Government spending.

Mr Williams said that the freeze’s worst feature was that it signalled a nullification of policies aimed at freeing up the economy.

“I hope that once the policies have been put in place to deal with inflation on a much longer-term basis, the Government will return rapidly /to its former strategy — so ardently proclaimed by Mr Muldoon in recent Budget speeches — of letting the economy be more guided by market forces," Mr Williams said.

“It is only in that kind of environment that our business enterprises can show the initiative and productivity .of which they are capable," he said. Unless the Government dealt immediately with longterm aspects of inflation, the freeze could be labelled an example of short-sighted “ad hocery.” Many businessmen were disenchanted with the Government’s growth strategy. “What they see is a number of very large projects, no doubt very fine in themselves. but occupying an extraordinary proportion of the Government's attention while the problems facing the rest of the business community are left unsolved," Mr Williams said. New Zealand’s, rate of unemployment was too high. He attributed ? it to high wage rates.

He said that his view was shared by the Reserve Bank economists who had

researched the causes of New Zealand unemployment and published their findings last month. Their report said that if wages had risen at the same rate as productivity during the 1970 s instead of rising much faster, 54,000 more people would have been employed. The report said that lowering wage rates would lower unemployment but also lower peoples’ standard of living. • . Mr Williams said that a “certain gentleman” had warned the country that it would have to accept a lower standard of living to improve its economy.

“He was loudly applauded for telling the 'unpalatable truth, and we elected him to power,” he said. But the “gentleman” had said his latest economic measures would preserve living standards.

“I wonder if this is not more ad hocery," Mr Williams said.