‘l’m no threat; I don’t carry much clout’

Press, 13 July 1985, Page 19

‘l’m no threat; I don’t carry much clout’

Mr Anderton sees policies for reducing the internal deficit at a time when the economy has a slow growth rate as being against the economic interests of the majority of the people. Instead, he advocates his own four-pronged approach. Economic growth has to be promoted by public and private investment, allied with some ability and incentive to save for that. Mr Anderton advocates a major savings scheme to which both employers and employees would contribute a percentage of wage increases.

The savings would be invested with an Investment Development Board that would have professional advice and guidance but would be representative of the workers, employers, and the Government, and would be based on -investment opportunities that created work,

particularly at the regional level. If they could be export-oriented at the same time, so much the better. “I worked out that a scheme like that would create somewhere between $3OO million and $5OO million a year — not a horrendous amount of money, but it is a start. And it’s the kind of investment that would go on continuously and would, with improving living standards and more people working, create more investment.” An important plank of his alternative economic direction is a tight imports policy while New Zealand has a serious overseas balance of payments problem — rather than the present policy of encouraging imports through lower tariffs and import controls. He says that curtailing growth as a means of reducing the overseas balance of payments problem increases unemployment. The overseas balance of payments situation is 10 times more important than the internal deficit, because the money is owed to international creditors who are likely to be much more stringent and intolerant of an inability to pay than those to whom the internal deficit is owed — New Zealanders themselves. “It’s an interesting fact,” he says, “that last year, while we have taken a great deal of credit for reducing the internal deficit, the external deficit was the largest it has ever been.” He does not believe that import controls should be relaxed in the present circumstances. “I’d favour using import control mechanisms in a quantitative sense which can give some absolute guarantees of how much you are going to spend, instead of leaving it to market forces.” He says that few people are aware of the “sleeping giant” that is the external deficit. “You may want to borrow again from those you owe. Then you have to cut back and reduce growth — how does that fit with the economic objectives? “As long as the Government can show that unemployment is improving, a lot of credit is due to it and it has support. But if our overseas payments are constrained, we have got to mortgage our future, and that has only one result — increased unemployment.” Mr Anderton says he is not suggesting that he knows all the answers. “But I am concerned that there is almost a high wire act being performed with the economy that is difficult to understand if you look at where the safety net is.” As well as his concern about the economic and social problems being created by Labour’s present policies, Mr Anderton says he is worried about Labour’s re-election prospects. He wants to see a Labour Government governing for 30 or 40 years. “That is the only way many of the fundamental changes that have taken place in New Zealand’s socalled egalitarian society can be reversed — the two-tier system of health which has developed; a widening gap which I’d even call, a chasm between the rich and the poor and the mal-distribution of

wealth and resources which that indicates; a failing education system; and a very sharp decline in the standard of housing and accommodation for a lot of people at the lower end of the social scale.” But to show why he is worried about Labour’s future, he says he has only to point to the fact that at the last election, with every imaginable political factor in its favour, the Labour Party’s share of the vote was only 43 per cent. That suggests to him the coalition of support was very fragile in both numbers and cohesion, and that any heavy-handed chipping away at it would leave Labour with electoral difficulties on its hands. “That is my fundamental concern,” he adds. Mr Anderton believes that the changes he proposes could be achieved by modifying Labour’s present policies.

“There are some elements oi what’s happening that are very good indeed. There is a feeling of freedom which the business community has that I don’t object to. I often felt very constrained (in my business) by bureaucratic control. “While I am suggesting a more planned and controlled approach, I’m not asking for a Draconian type of control. There is a certain element of consensus in this. If you’re going to have a prices and incomes policy that’s going to work, you must have consensus agreement on it. You can’t impose it. That was the problem with Muldoon’s things — they were imposed. “It’s the fundamental recognition of the place of planning and control in the economy which I still believe is important.” He says that the private sector has to realise that a modern mixed economy is a partnership between the private sector and the Government. “This mania for attacking the public sector, saying public servants should be shot at dawn, or that we shouldn’t have any public service; you can’t run an economy like that.” The Prime Minister has stated that his Government stands or falls by Roger Douglas’s policies. Does that leave any room for manoeuvre along the lines that Mr Anderton suggests? “The only comment I could make on that kind of approach,” he replies, “is that the Labour Government is the Labour Government

because it is the Labour Party’s creation. The Labour Party selects the candidates; the Labour Party determines the policy; and without a Labour Party alive and well there wouldn’t be a Labour Government of any description — Roger Douglas’s or any other’s. “I find it very hard to forget that, because I’ve been for so long a part of it and because I’ve been so critical in the past of those who have gone into Parliament and seemed almost instantly to forget why they’re there and who got them there.” Mr Anderton does not consider his views to be at all radical. He points out that they are the kind of policies that were followed in New Zealand’s best economic times. He blames Sir Robert Muldoon for giving intervention a bad name, by intervening incorrectly even though his intentions were correct; for example in trying to achieve price and incomes stability. “He didn’t intervene fairly or sensibly. He used a blunt axe — no flexibility, no acknowledgement of pressures.” But has the Government not gone' too far down the Roger Douglas economic path to change course now? “I don’t see any real difficulty in providing some alternative,” Mr Anderton says. “The Minister (of Finance) provided an alternative when he was in the shadow cabinet (he had to move from the front bench) and he would say that he’s now implementing it. I’d say there’s got to be some thinking about present policies in case an alternative is needed. I don’t see mine as any great threat.” He says his alternative proposals, aimed at alleviating the pain of those suffering from the results of present policies, are not disloyal.

“It’s an alternative viewpoint that can be contained quite happily,” he says. “It’s not dangerous, but it is necessary — to hold some elements of the Labour Party together. “Some elements of the trade unions and some ordinary people are confused by the present policies. Some are threatening to resign, although they want me to stay and do something about it. I think some dissent is healthy.” “If there’s no room for dissent without resignation, if at the end of the day you toe the line, people have the right to ask (as we say to National people) ‘why didn’t you speak up? You are all guilty.’ You can’t belt someone who does it at the time. “The main stream of business is in support of the present policies, but if there are difficulties in holding the party together, or in the policies themselves, it’s not a bad idea to have some contingency plan available — some way of ameliorating things. “It’s no threat. I don’t carry much clout.”

‘Some dissent healthy’