Mr Knox again attacks Govt economic policy

Press, 18 January 1986, Page 27

Mr Knox again attacks Govt economic policy

PA Wgtn The Govt’s economic policies have again been attacked by Mr Jim Knox, president of the Federation of Labour. Commenting on the “state of the nation” speech by the Prime Minister, Mr Lange, Mr Knox said it showed “just what Roger Douglas’s market approach to economics means for working people.” “I do not accept that more unemployment, continued high inflation and high interest should be a 'necessary’ part of economic policy,” Mr Knox said. Mr Lange had said the economy was expected to contract this year. “For the Prime Minister to say the economic downturn is necessary and then in the same speech to blame the wage round for increased unemployment and

inflation, is not logical or correct,” Mr Knox said. “What people should be reminded of is that the Treasury Ministers’ moremarket experiment requires an economic depression and more unemployment. It’s part of the plan. “The Government made that clear to us in the tripartite talks last year, so they can hardly now blame job losses on the wage round.” Mr Knox said the floating dollar was just as important in determining price rises because of New Zealand’s reliance upon imports. “At most the wage round will mean a 1 per cent or 11/2 per cent rise in inflation over what was already officially forecast. That is a small price to pay for the urgent relief it will provide to working people. “What we need to hear is

that policies are being altered to stop the rot, which has been going on since before the freeze, and to create new jobs for the 50,000 already unemployed,” Mr Knox said. The Opposition finance spokesman, Mr Bill Birch, said the economy will be in worse shape at the end of Labour’s three years of Government than before it took office. “Inflation, interest rates, balance of payments, official overseas borrowing and unemployment are now trending worse than in July 1984,” he said. The Lange Government’s main achievement would have been to convert a strong, growing economy with a real growth rate of 8.5 per cent to the negative growth rate of minus 2 per cent now forecast for the March, 1987, year.

The productive sectors of manufacturing and farming, which had to be big contributors to any economic recovery, were now showing lessconfidence than in any period onver the last 10 years, Mr Birch said. “Where are the policies now to restore the growth in exports and general economic expansion? They are non-existent.

“We have, in lieu of an economic strategy, a Douglas ‘open slather’ approach with the Government washing its hands of the consequences, including the 16 to 18 per cent wage rise of 1985.

“The Government must find more credible explanations for the problems it has created, and urgent solutions to them,” Mr Birch said.