Govt policy under fire from assembly

Press, 25 August 1983, Page 1

Govt policy under fire from assembly

PA Wellington The Government’s interventionist policy was strongly criticised by the Assembly of Business in its communique yesterday. The communique summed up the themes prevailing during the three-day convention, held in Wellington, and organised by the Chamber of Commerce.

The communique called for less protectionism, and improved co-operation in the community, and expressed its concern about New Zealand’s proposed $3200 million deficit. It said that the assembly believed wage-fixing

methods and rewards should reflect productivity. “Over all, remuneration levels should be capable of both upwards and downward movement in line with productivity and the economic environment.”

Acknowledging the dramatic cut in inflation because of the wage-price freeze, the assembly said that there was serious questioning of the methods used and their longer-term sideeffects.

Concern was .also expressed about the delay in addressing' post-freeze issues such as wage-fixing. There was concern that

the deficit would either refuel inflation or push up interest rates and that restraints on Government spending were not commensurate with sacrifices made in the private sector.

Profound concern was expressed about the absence of consistent medium-term and long-term economic policies. This prevented businesses planning for investment and job-creation. Inhibitions were placed on structural and strategic planning-by the three-year election cycle which

resulted in ad hoc policies as politicians sought re-elec-tion.

“The assembly noted the climate of frustration caused by a proliferation of regulations and intervention, including retroactive measures.

“This frustration inhibits the making of business decisions for investment and the expansion of production and employment.”

The communique called on business for redoubled efforts to explain to the community the long-term effects of an environment where decisions were increasingly taken out of the people’s hands by the State.

It was worried about a prevailing view that profit was evil and should be penalised.

“Unless profitability is encouraged, New Zealand firms will be unable to compete in the marketplace and offer new jobs,” it said. Focusing on employment, the assembly said that it believed the creation of jobs was a top priority.

“The best prospects for productive new employment lie in the private sector and policies must be directed to encouraging expansion in this area,” it said.

It accepted that poor communication between management and labour had in the past contributed to a confrontational relationship and lack of trust.

Both management and labour should recognise that they worked for a common purpose. There should be positive action on all fronts to foster improved living standards and new employment opportunities, there should be a new attitude of co-operation for survival, and also tax reform to restore the attractiveness of investment in enterprises. The communique also said that protectionism should be dismantled more quickly, as it seldom created jobs.