THE PRESS TUESDAY, DECEMBER 24, 1985. Raising the spirit

Press, 24 December 1985, Page 16

THE PRESS TUESDAY, DECEMBER 24, 1985. Raising the spirit

By custom, Christmas should be a time of good cheer, not just a time of fine food and other fare but, as that phrase also conveys, a time of raised spirits. It is a time to pause, to set aside — however temporarily — the tribulations of the workaday year, and to take stock of the blessings of life. It may also be a season of excesses: too many meals, too many drinks, and all kinds of material extravagance, even by those who can least afford it. Whatever may be the shortcomings in. the way some choose to celebrate the Christmas festival, those shortcomings cannot wholly obscure the communal belief in the Christmas message of cheerfulness and hope. In spite of the decree for happiness at Christmas, the time will lack joy for many people. The ordinary — and extraordinary — tolls of life will forbid the normal celebrations. This apparent denial makes Christmas all the more important. To impoverished people in many parts of the world, an ordinary Christmas table in New Zealand would be an unimaginable feast. In other communities, Christian as well as non-Christian, Christmas will bring but the scantest respite — or none at all — from oppression, strife, or war. Closer to

home, there are people whose needs are great, but who are neglected.

Nevertheless, even to people for whom the occasion is not a religious festival, Christmas has imparted its most important qualities. The sense of charity, consideration for others, the expression of hope for a brighter and better future — these tenets are shared by many religions. Wherever Christians form a part of the community their observance of Christmas strikes a receptive chord in people of all faiths. Christmas is not compulsory; but its spirit is compelling. The festival may mean many things to different people, but its inspiration of good will is unmistakable.

This annual strengthening of the feeling of good will, easily strained by the rigours of daily life, is a worth-while custom. The sadness is that the generosity of spirit abroad at Christmas is more sparingly parcelled out for most of the rest of the year. To offset, at least in part, the depressing nature of many events that occur between Twelfth Night and Christmas Eve, the world needs Christmas. It is an important reminder of the better side to human nature.

Bail-out of N.Z. Steel

Big industries have to make decisions about developments in world markets years ahead of production, and occasionally have to take big risks. The calculation made just four years ago to expand New Zealand Steel’s Glenbrook mill entailed risks; but few would have predicted the horrendous cost over-runs or the considerable industrial trouble that have combined with other factors to put the company more than a billion dollars into debt. Even if the decision to expand the mill was in error — and that is not necessarily so — the Government had little option but to mount the rescue operation that it announced on Friday. If for no other reason, the protection of New Zealand’s name in the world of international contracts warrants the temporary injection of taxpayers’ money to ensure that the company does not default on its debts. The temporary nationalisation of the industry that this rescue entails is meant to be short lived. The Government has promised to sell the shareholding — roughly 80 per cent — that it will acquire in the company as soon as the industry is back on its feet. Just when this might be is by no means clear, what is certain is that the company’s shareholders would not have.been able to write out the $ll3B million cheque needed to cover the company’s undertaking. To set the $1 billion figure in perspective the Government’s 'total taxation revenue this financial year will be less than $l5 billion.

There was no guarantee that a foreign partner would have been forthcoming if New Zealand Steel had looked abroad. New Zealand has the ironsands, comparatively handy to Glenbrook, which form the basic raw material for the mill. New Zealand also has the coal needed for manufacturing steer ait the nearby Ohinewai field — though the costs of extraction have escalated mightily and are now quite forbidding. These factors might be considered in the company’s favour: the depressed state of the industry world wide most certainly is not. Of all the world commodities that have market problems at present, steel must be near the top of the list. United States and European steelmakers are finding it tough; there is a vast over-supply of manufactured steel in the world; and most of the world’s biggest companies are having financial troubles. The importance of this to New Zealand Steel — and its new owners, the taxpaying public — is that the rolling mills that are a part of the expansion, to be economic, are bigger than can be justified for New Zealand’s demand alone. Thus, as well as fulfilling the needs of the New Zealand market for certain steels, and preventing the sort of shortages of

steel that once regularly occurred in New Zealand, the Glenbrook plant and its expansion rely to a certain extent on the ability to export. If difficult world markets were not headache enough, the Government’s new tariff regime, announced 10 days ago, can only have made matters worse on the domestic front.

Under the regime, New Zealand Steel is afforded no protection against imports for any new items that it might market after this month. The total protection it had on existing items is being reduced from next week. Import licences will be granted next year for up to 15 per cent of the country’s requirements in tube and pipe, and for up to 10 per cent of the country’s requirements in other steel products that New Zealand Steel manufactures. These percentages will increase annually until 1990. New Zealand Steel will then have to face competition without any import restrictions. At the same time, the level of duties imposed will be reduced progressively to a maximum of 10 per cent by 1990.

These moves were welcomed in Australia, but the round of negotiations on the closer economic relationship with Australia that began a fortnight ago might hold more grim tidings for New Zealand Steel. Steel production has a particular significance for C.E.R. New Zealand has long been an important market for Australian steel. Under C.E.R., duties and import restrictions on most products traded between the two countries have been markedly reduced, or are being reduced progressively. Any ruling on steel has been delayed until now. At the present round of talks both countries, for the first time, have proposals on the table to ease trans-Tasman trade in steel. Australian interests are likely to press for even more rapid access to the New Zealand market.

None of this is calculated to comfort the taxpayer, who must wonder also about the worth of project estimates that bear no relation to the final bill. In October, 1981, when the expansion project was announced, the cost was put at $7OO million. Presumably, the decision to proceed was made on the basis of that figure and associated revenue predictions. The Minister of Finance, Mr Douglas, now talks of the expansion as a $2600 million project, of which $ll3B million is debt. The reliance on loan money, the industrial strife at the site, and several other factors, only some of which are under the control of New Zealand and New Zealanders, have contributed to this state of affairs. To the man in the street, however, the biggest risk in the project might appear to have been relying on an estimate as far astray as $7OO million is from $2600 million.