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Economic changes "painful’

By OLIVER RIDDELL in Wellington The prediction that pending economic changes would sometimes be painful has been made by the Minister of Trade and Industry, Mr Caygill. He promised that the Government would try to gradually develop a much stronger manufacturing sector and more prosperous community to give time for adjustment. He told the Wellington Manufacturers’. Association that the opportunities were available, but they would not wait for ever.

As a country, New Zealand had tried to develop

production and trade by leavy protection of its wme market, and substantial Government help to develop exports. It did not take much insight to see that those policies had had only a rather mixed success, Mr Caygill said. They had created a ‘patchwork economy,” with some very good patches, and some which spoiled the over all effect. There would now be increased import competition in the New Zealand market and intensely competitive conditions on many exports markets, he said. Imitative product de-

velopment. would not get New Zealand far. It would have to be as imitative and enterprising in developing products as it was in marketing them. New Zealand was small enough, isolated enough and backward enought to produce some of the best products in the world, Mr Caygill said. What were supposed to be its worst drawbacks could be turned to advantage. Its smallness had the advantage of creating. cohesion; an ability to learn from others’ experience of competing in the world. Its isolation had the advantage that markets could be looked at from a distance; New Zealand could stand back and look objectively at what worldmarkets wanted.

New Zealand would stay backward in the sense that it did not have the size to make big technological developments in most fields, but it could learn from the disasters of other pioneers. Government changes to import protection would encourage manufacturers to change quite quickly, he said.

Some companies would find that freer import access gave them the chance

to drop some lines and concentrate resources on other lines; some would find that easier access to lowercost imported materials and components opened up new opportunities. “It is hoped that not too many companies which were virtually forced into uneconomic manufacture by import licensing will now wish to revert to importing,” Mr Caygill said. Some might need radical changes to the nature of their business but the great majority of manufacturers would adjust without too much difficulty to greater import competition than they had in the past. The changes would not result in serious disruption in manufacturing, he said. One of the most important lines of development along which industry would move was that of adding more value to natural resources.

This was not a new policy, Mr Caygill said. It had been the policy of successive Governments. What was new was that the Labour Government saw greater added value to exports as an important factor in achieving the kind of export and economic growth New Zealand needed.

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Permanent link to this item

https://paperspast.natlib.govt.nz/newspapers/CHP19840907.2.79.17

Bibliographic details

Press, 7 September 1984, Page 14

Word Count
497

Economic changes "painful’ Press, 7 September 1984, Page 14

Economic changes "painful’ Press, 7 September 1984, Page 14