THE PRESS THURSDAY, DECEMBER 19, 1985. Australia’s opening for N.Z.

Press, 19 December 1985, Page 14

THE PRESS THURSDAY, DECEMBER 19, 1985. Australia’s opening for N.Z.

Just when the interest rates in New Zealand seem to be edging downwards and the value of the New Zealand dollar is getting to a point at which exporters believe they can live with it, interest rates in Australia have started climbing markedly. Prime interest rates in Australia have increased to 21 per cent: that is the rate at which trading banks will lend to borrowers who are deemed to be a first-class risk, such as substantial corporate businesses for short terms. Some overnight money has gone higher. Banking advisers are reluctant to say that rates will go no higher. In short, it seems likely that Australia is in for a dose of the high interest rates which New Zealand has found so bitter over the last few months. The cause of the rise in interest rates in Australia is similar to the cause in New Zealand; the Government is running a very tight monetary policy. It may be expected confidently that the effect of the tight monetary policy and the rise in interest rates in Australia will have the same effect as the same policy had in New Zealand: the value of the Australian dollar will be driven up. The effect may be even more marked in Australia because the inflation rate there is 8 per cent which means that the real interest rate, that is the difference between the inflation rate and the actual interest rate, is between 12 per cent and 13 per cent, making it about the highest in the Western world. This is bound to attract overseas investors in large numbers and the value of the dollar, whose recent fall has given Australian exporters a boost, will rise again. This will mean, within Australia, that local manufacturers will lose out to imports, and Australian exporters will find it hard to be competitive. In New Zealand, exporters will find the higher value of the Australian dollar and the lower value of the New Zealand dollar to their advantage. Australia is New Zealand’s biggest market for manufactured goods, and the sale of these goods, with their added value and their potential for employment, has the most widespread effect on the New Zealand economy, even though the over-all value is smaller than that of the exports of farm produce.

Although the advantage will lie with New Zealand exporters for a while, New Zealand must hope that the Australian economy will remain in good heart, because the New Zealand economy is now so locked into the Australian economy that any downturn in Australia is bound to have a bad effect on New Zealand. The Australian growth rate has been strong; real growth, when inflation is discounted, runs at between 4 per cent and 5 per cent. The big problem that Australia is going to face is that its balance of payments seems certain to worsen as the dollar rises in value and imports flood into the country. Although the Australian economy is more diverse than the New Zealand economy, and is a much larger economy, it can sometimes be forgotten that Australia is still fundamentally an exporter of agricultural produce and an exporter of minerals. The world prices for such exports are generally poor. In quantity, Australia’s exports of coal, for instance, have been good; but the prices have been low. In a way, the resources of Australia have helped to maintain an attitude that better economic times are never far away. New Zealand, with fewer resources, took the plunge into worse times sooner.

One difference in economic management between the two countries arose out of the economic summit meetings that were held in both countries. In Australia, an accord was reached between the unions and the Government under which wages were indexed to inflation. This brought considerable industrial peace to Australia and modified wage claims. The New Zealand economic summit meeting disbanded without any such accord. The present wage round has meant high settlements and a number of strikes. However, the indexing of wages in Australia has meant that, in some industries, the wage rates have made Australian manufacturing uncompetitive. The Government has decided to hold the money supply as tight as possible, but is being blamed for having a strict monetary policy without matching it with a strong wages policy. For the time being, New Zealand exporters can score off Australia’s problems.

Juries and confidentiality

Confidentiality of what goes on in a jury room is not protected expressly by law in New Zealand, but rather by a long-standing convention, according to the public issues committee of the Canterbury District Law Society. The committee, an independent body which expresses only its own views and does not represent the views of the society as such, was commenting on aspects of confidentiality of jury deliberations raised by publicity of the aftermath of the Muldoon-Jones defamation case. Jurors in New Zealand are advised by the Department of Justice in a pamphlet commonly displayed in jury rooms that "even after you have delivered your verdict you must not disclose anything that was said in the jury room to anyone else,” the committee said in a statement.

“In fact, there is no express law in New Zealand prohibiting such disclosures, but over many years the Courts in both this country and others have accepted the existence of a rule of conduct, or convention, to that effect. Moreover, publicity concerning jury deliberations has generally been viewed as potentially amounting to contempt of Court.

“The matter was tested in England in 1980 after publication of a magazine article entitled ‘Thorpe’s Trial, How the Jury Saw It’. The article concerned the acquittal of Mr Jeremy Thorpe and others upon a charge of conspiracy to murder. “Contempt proceedings were taken against the publishers of the magazine. In the event it was decided that the particular article did not constitute contempt of court because it was written in good taste and did not amount to

an interference with the due administration of justice. “However, the case resulted in the passing of legislation making it a contempt of court in England to ‘obtain, disclose or solicit’ any information concerning jury deliberations in an actual case.

“Comparable legislation has not been passed in New Zealand. That is not to say that the High Court would not intervene under its general power to punish for contempt in an appropriate case. “The concern of the Courts to ensure confidentiality in this area is based upon the argument that, unless secrecy is maintained, future jurors may feel inhibited in expressing their views while a verdict is being reached. It has even been said that if the secrecy of the jury room was lost, the very process of trial by jury might be put at risk,” the committee said.