Party offers its recipe for recovery

Press, 14 October 1985, Page 40

Party offers its recipe for recovery

PA Wellington The New Zealand Democratic Party has suggested a seven point programme to the Government to avoid economic disaster. The party’s leader, Mr Beetham, said that the Government must be pressured to abandon its failed experiment with the free market and implement a crash seven-point programme to avert economic disaster. Mr Beetham said the Government should: Set maximum interest rates for Government stock tenders and lower them by 3 per cent every six months until they reached an initial average of 10 per cent. Oblige the trading banks to reduce overdraft interest rates by the same formula. Put deposit and lending regulations in place to force, within the six months, a corresponding reduction in all other interest rates if they did not fall in tandem with the required reduction 1 ' in overdraft rates. Abandon the free floating

exchange rate and return to * a fixed exchange rate to get. sanity and balance back; into the relationship between export and import - prices. . Require importers of luxury goods to pay a premium j on their use of foreign ex-"; change and use this to sup- 1 plement disastrously low farm incomes' without re- - sorting to supplementary'; minimum prices or tax- ' payer subsidies. I Restore low-interest » Reserve Bank facilities to; the producer boards im- < mediately.

Substitute the indirect taxing of all financial transfers for the goods and services tax to slow down money circulation, reduce financial speculation, stimulate productive investment, and., enable a reduction in industry protection without risk of unemployment This should be done while still producing sufficient revenue for the progressive reduction of the internal deficit in addition to direct tax relief.