Socred opens campaign

Press, 21 June 1984, Page 1

Socred opens campaign

PA Wellington Reforms were needed to avert New Zealand’s economic and social collapse, which was a lot closer than most people realised, said Social Credit’s leader, Mr Beetham, last evening. Launching his party’s election campaign, Mr Beetham said the country was living well beyond its means, reaping “a whirlwind for what has been sown over the last 10 years.” Government promises of economic growth had not been met, he said. “The only growth has been in the level of S.M.P.S, welfare handouts, and in profit and interest transfers overseas,” Mr Beetham said. “The promises of huge growth have been swept away in a torrent of economic mismanagement and abysmal failure. After more than a year and a half of a wage-price freeze all that has happened, apart from a temporary mechanical suppression of inflation which won’t last, is that economic stagnation has become further entrenched. “Economic tensions between interest groups have tightened as the rich got richer and the poor have got poorer under an unjust financial system,” he said. “Racial tensions have spawned hardline groups on both sides.” Social Credit could offer the only way out of New Zealand’s current dilemma with its system of participatory democracy and econo-

mic reform. Mr Beetham said. He outlined the basic needs: • For a socially responsible enterprise system incorporating individual worker shareholding to distribute wealth widely through the community and disperse the benefits of new technology. • To encourage small businesses, the growing points of innovation, enterprise and employment. • For a system in which people are regarded as assets and not treated as economic digits that can be dispensed with. • For real worker participation in management and genuine industrial democracy. ® To ensure that the financial system works for the good of society as a whole and not for those who control it. Because these basic requirements - were missing the New Zealand economy was in a “shocking mess,” Mr Beetham said. Social Credit had supported the introduction of the freeze on the condition that the time was used to put in place policies that would keep inflation down permanently, restore productivity, and cure unemployment. “We have seen virtually nothing done to, secure these goals. All we have had are pathetic, pitiful, and piecemeal attempts by the Prime Minister to force some interest rates down. “Not only have his approaches been largely inef-

fective, but they have produced distortions in the financial markets." Mr Beetham said Social Credit advocated a dramatic reduction in all interest rates “in a manner that is fair all round and which does not produce the sort of dislocation we are now seeing.” A Social Credit government would reduce all interest rates to at least half their present levels, with a minimum of 5 per cent, he said. Although some would claim such action would breach existing contracts, Social Credit considered the altered economic circumstances and the mechanical suppression of inflation justified it. “What the policy will do is force a desirable amount of investment into new equity venture capital and new production where it is urgently needed to restimulate the economy and provide new wealth and new jobs,” Mr Beetham said. “The 50 per cent reduction will lower the annual interest bill on the internal debt by close to $5OO million and will also reduce the internal deficit and the tax take to cover it by almost as much. “Lower interest on farm and business loans will reduce costs and make more money available to increase and diversify output and expand the number of jobs. “The reduction in over-all financial costs ... will go a long way to hold prices and prevent any new upsurge in inflation,” Mr Beetham said.