Key for 1980s outlined

Press, 17 August 1983, Page 29

Key for 1980s outlined

Parliamentary reporter Reducing inflation by linking monetary expansion to increased productivity, is the. key to sustained development of New Zealand manufacturing, said the Manufacturing Development Council. This is the main conclusion of a three-year study by the council, sought by the Government in 1980. The Government asked the council to formulate a development package that was compatible with overall economic and social obioMivAc fnr maniifart-iirin?

in the 1980 s. A strong, efficient and innovative manufacturing sector was one of the essential ingredients to provide the base for prosperity to achieve the country’s goals, said the council’s chairman, Mr G. W. T. Christie. An essential ingredient for growth was business confidence. This would enable business entrepreneurs to develop forward-looking plans with confidence in a stable environment where economic policies were well devised, consistent and anv

changes needed were gradual, he said. Apart from inflation, the report wanted labour costs restrained to a level consistent with the real income of the economy. The cost of infra-struc-tural services (such as transport) had to be reduced because these inhibited the efficient use of resources. Monetary and fiscal stability was needed, and the tax base had to be broadened, the report said. Increasing investment in manufacturing was needed, moving where possible to a

less regulated economy. Progress had to be made, gradually, towards lower and more uniform levels of protection, the report said. But an effective regime of export incentives should be continued. More funds ought to be available for research and development. The report wanted foreign investment to be encouraged, where it helped attain national economic goals. A reduction was needed in the disincentives to taking risks and being innovative, it said.