Figures show ‘a basic failure’

Press, 11 February 1983, Page 1

Figures show ‘a basic failure’

PA Wellington The overseas exchange transaction figures released yesterday showed "a basic failure".in the Government's economic policy, said the Leader of the Opposition, Mr Lange. The “think big" policies 1 had created new pressures on overseas exchange trans--1 actions and at the same time earnings from traditional exi ports, expecially meat, had ! plummeted, Mr Lange said, i “No new policy initiatives j have been taken to arrest j! this alarming pattern," he | said. “What is needed is a comprehensive international marketing and product diversification programme. We have to get out and see what people want to buy.” I The effect of supplementi ary minimum payments I made the situation shown in i the figures even worse. I “Farmers will go on producing meat whether it can be sold or not. New Zealanders cannot live like that much longer," said Mr Lange. The country, needed a pub-

lie sector investment programme to encourage growth in areas where NewZealand had a comparative advantage over other economies. Also needed were a “comprehensive plan" to encourage balanced investment, a more aggressive marketing approach, a new approach to “add value to exports," and a promotion of efficient domestic industries to substitute for imports. The Prime Minister, Mr Muldoon, said that even though Mr Lange had confessed to being no economist, he should have been capable of better comment on the figures. "It is all good stuff taken straight from the files,” Mr Muldoon said. “There is nothing new in it. It was 1981 election policy." Mr Muldoon said the figures were “nothing spectacular.” They “jumped about a bit as big payments bunched up on both the debit and credit sides of the account." One month's figures thken in isolation were likely to give a wrong answer, he

said. Mr Lange's analysis failed to count ■ the “think big" projects as a policy initiative to curb the deficit. The projects on stream would more than meet the costs of servicing the loans to build them. Mr Muldoon said.' It was excessive to say that meat prices had plummeted. Prices were down a little but quantities were up. If farmers had not produced 50 per cent more meat in the seven years after 1975 New Zealand would not have been saved, Mr Muldoon said. He was unconcerned that the 1982 current account deficit of $1845 million was almost double the 1981 figure. “The deterioration in the external balances is something that we have known for quite a long time, and indeed forecast,” he said. “The forward projections are for this to flatten out during this year or on into the middle of next year - the 1984 trade year." Transaction figures, page 3