N.Z. Party favours a floating dollar

Press, 10 January 1984, Page 6

N.Z. Party favours a floating dollar

PA Wellington A floating exchange rate with the dollar’s value set solely by market forces would be introduced by the New Zealand Party, the party’s spokesman, Mr Bob Jones, promised.

“In such a system no foreign debt need accrue, no balance of payments deficit is possible, no supplementary minimum prices to farmers or export incentives to manufacturers would be necessary,” Mr Jones told an electorate workshop meeting in Auckland.

“All export-orientated activity, including many but not all manufacturing activities, notably those with a low imported content component, would boom.” The floating rate, replacing the present pegged rate with its periodic adjustments, would sever the relationship between the internal and external economies.

A resulting booming internal economy would al-

low radical variations to the taxation system, Mr Jones said. The Prime Minister, Sir Robert Muldoon, had allowed a huge gap to evolve between New Zealand’s real and actual exchange rate, Mr Jones said. “He has done this solely to lower the New Zealand cost of the ‘think big’ schemes’ foreign financing.” Detailing the party’s taxation policy, he said there would be no tax on incomes to $lO,OOO a year, and a flat 30 per cent rate on income more than $lO,OOO. All company tax on earnings distributed as dividends would be abolished.

Tax would be a lower percentage of income. However, incomes would be higher, giving a higher total tax take.

The tax system would be motivated by revenue rather than egalitarianism, he said.

“Government expenditure on S.M.P.s, loss of revenue

through export incentives, expenditure on unemployment and welfarism would disappear. “In such an economy there would be no unemployment, indeed there would be a shortage of skilled workers.”

Mr Jones said New Zealand now had the worst of capitalism and socialism. “We impede and frustrate through excessive regulation and controls and most of all, through a ludicrously punitive tax system, the flowering of the capitalism system. “By taking the worst of socialism we end up with the sort of result we have today: an obsessively dependent mentality in our people reflected by our massive welfare expenditure and a frugal approach to education and health.

“In a nutshell, our overall programme (is) to take the best of capitalism and socialism and weld them together.”