P.M. snubs National group

Press, 26 July 1983, Page 2

P.M. snubs National group

PA Wellington The Prime Minister, Mr Muldoon, had a cutting response yesterday for a National Party group which warned him not to overinflate the economy with an excessive deficit in Thursday’s Budget. “I have never met these people. I didn’t even know they existed,” Mr Muldoon told journalists. “I don’t propose to dignify them by discussing it in public.”

A letter sent to Mr Muldoon by the group, which was set up in the party’s Wellington division to examine economic policy, expressed misgivings about price and income controls as a means of fighting inflation.

The letter was also sent to Government members of Parliament. A copy was leaked to the news media at the week-end.

It said the Labour Party, “in the person of (Roger) Douglas, (Geoff) Palmer and

(David) Caygill, is now outflanking the Government in presenting itself as the party of prudence and realism.”

It expressed concern that Mr Muldoon might subject the economy to an unrealistic and unsustainable stimulation in the run-up to election year. The party’s Wellington division chairman, Mr Hamish Buchanan, confirmed the existence of the Wellington Division Economic Policy Group. Papers have been sent to Mr Muldoon before by the group. The Government’s deficit spending, predicted to increase dramatically in this week’s Budget, was the basic cause of inflation, they noted. Mr Buchanan said the group comprised about a dozen senior Hutt Valley party members who had expertise to offer and who met regularly to discuss economic policy.