Mr Douglas dismisses high jobless prediction

Press, 24 January 1985, Page 7

Mr Douglas dismisses high jobless prediction

PA Hamilton The Minister of Finance, Mr Douglas, yesterday dismissed claims by the Institute of Economic Research that unemployment will remain high for the next three years. Mr Douglas said in Hamilton that the institute’s predictions of high unemployment were overly pessimistic.

“We’re seeing at the moment the strongest employment growth for about

10 years. I also think that there is a re-allocation of resources going on in New Zealand, and a great deal of that is going into more employment - orientated types of industries.” He also rejected a claim that improvements in the economy would be partly the result of policies of the previous Government. “I guess in 10 years they can’t have done everything wrong but they did 90 per cent,” he said.

He welcomed other predictions by the institute for increased economic growth and a nil balance-of-pay-ments deficit by 1988.

He said the forecasts reflected the Government view that the economy was going to improve after an initial period of belt-tighten-ing. “There is no reason why we can’t ride that out reasonably well,” he said. Mr Douglas made his own prediction that 1985 would

be the toughest period of readjustment in the economy for the next three years, and restraint would be called for.

Mr Douglas was full of praise for workers who, he said, recognised that New Zealand had been living beyond its means. Keeping wage demands low had helped maintain profitable companies and jobs. “Obviously we need profits ‘if we’re going to have jobs,” he said.