Govt economic policies ‘fairly successful’

Press, 2 August 1985, Page 5

Govt economic policies ‘fairly successful’

The economic policies of the Government have been fairly successful, said Mr C. S. (Rufus) Dawe, economic adviser to the Westpac Banking Corporation, in Christchurch yesterday. The removal of many controls had not brought about the deluge of undesired effects, such as excessive imports, that so many commentators had direly predicted. It had been shown that a free-market economy did work, Mr Dawe said. Although it might seem that, having gone over the cataract, the Government was committed to follow the designated path, there was still a danger that it might weaken. While the New Zealand economy was trying to get back into the real world, some people had lost their privileteJd position, he said. To thfee who had been

living in a hothouse, it was painful to have all the doors suddenly opened. In the year running up to the 1987 election the Government might become more inclined to give in to those who said they had been disadvantaged. Mr Dawe said that unfortunately the welcome reduction in the domestic deficit was mainly the result of an increased tax take, not of a substantial reduction in Government expenditure. The restructuring of the economy had only just begun, and there was no room for rewards yet. It was to be hoped that the Government’s resolve would not weaken, he said. Once one wandered into the land of controls, one got lost in their wilderness, and each control always seemed to require a further one to make it work. Mr Dawe said an interesting aspect M the

New Zealand economy was its similarity to the United States economy. The two moved much in phase. Now that New Zealand was a more integral part of the international economy in a one-world situation, the strength or weakness of the United States economy would have a greater influence on domestic affairs.