Mr Jones sole threat — Sir George Chapman

Press, 22 September 1983, Page 12

Mr Jones sole threat — Sir George Chapman

Wellington reporter

The Wellington property magnate, Mr Bob Jones, may cause problems for the National Party in his challenge to the Minister of Trade and Industry, Mr Templeton, says the former president of the National Party, Sir George Chapman. Mr Jones has mounted a challenge in Mr Templeton’s Wellington seat of Ohariu. But Sir George told an Institute of Management seminar in Wellington that the New Zealand Party, other minor parties, and Social Credit would take up no more than 15 per cent of the total vote in the 1984 General Election.

Social Credit would poll no more than 10 per cent of the popular vote, Sir George said. This was only half of its percentage in 1981. He believed the Social Credit “bubble” had burst, “as it did in the 1969 General Election after peaking in the 1966 elections.” The 1984 elections would be a close result again, he said. “Early this year the swinging vote moved to Labour, giving it a big lead in the polls. More recently it has swung back to National. I predict this volatility will continue right up until the election. Sir George said that political commentators were dominated in their thinking by the landslide victories in 1972 and 1975. They forgot that most New Zealand elections were closely fought. “I suggest, that history is often a useful guide to the likely outcome of a General Election, and over the last 35 years National and Labour have shared 80 to 90 per cent of the popular vote, with minor parties sharing the balance.”

Although Mr Jones might cause problems in Ohariu, the New Zealand Party and other minor parties, excluding social Credit, would taken no more than 5 per cent of the popular vote, he said.

Sir George, an accountant and the chairman of B.N.Z. Finance, Ltd, said that the management planners could expect low inflation and interest rates for the whole of 1984. But there were two

imponderables: the wageprice freeze thaw, and funding of the internal deficit. “The internal deficit for 1984-85 is likely , to be comparable to 1983-84,” he said. “This is high by New Zealand standards. The Government’s success in funding this deficit in a non-infla-tionary way will be crucial to a continuing low inflation rate and low interest rate policy.” The policy would also depend upon the way Government came out of the freeze and on the build-up of inflationary pressures in the economy after 20 months. The key determinant of New Zealand’s prosperity was the external balance of payments figure, and the “one to watch in making forward management decisions in turbulent times.” He had confidence in New Zealand’s future and based it on self-sufficiency in energy.

The easing of New Zealand’s dependence on imported oil fuels by the use of natural gas and a big oil strike or strikes wbuld change the whole basis of the New Zealand economy, he said. The business slow-down

and rises in unemployment traced back to the second oil shock in 1979, although New Zealand’s terms of trade had been adverse from the first oil shock in 1974, Sir George said. “So the most significant step taken by the Government to increase New Zealand's independence in the world is the move towards self-sufficiency in liquid fuels.

“But the temporary stabiality in the cost of oil has diverted attention from the urgent need to use New Zealand’s own natural resources, particularly the giant gas field at Maui, to protect our country against the next and inevitable rise in oil prices,” he warned. Sir George said that unemployment would be high in the Western world for the next decade.

He outlined four big changes taking place in the world economy which would have “major implications” for New Zealand for the rest of the century.

• The rising level of technology. This would reduce employment opportunities until education and job training adjusted to

changing job needs. There was less and less need for unskilled workers and a greater need for a skilled workforce. @ The relationship between oil demand and supply. “There is no doubt that circumstances will again occur in the next few years to tip the balance so that demand again exceeds supply This will produce a repetition of the problems of the last few years and a return of the inflationary spiral.” 0 The inter-dependence of national economies. “If the world economy is booming, New Zealand booms. If it is y depressed, New Zealand is depressed. This is a simple truth that many New Zealanders refuse to accept.” Periods of growth and recession were occurring more frequently, making economic predictions more and more difficult. ® Political intervention in domestic economies because of frequent growth and recession periods. The outcome is higher budget deficits, the disruption of free market forces, and rising protectionism, he said.