Farm incomes to fall 53% —Mr Bolger

Press, 20 February 1986, Page 3

Farm incomes to fall 53% —Mr Bolger

Net farm income is estimated to fall 53 per cent this year to $13,900 a farm, according to the Deputy Leader of the Opposition, Mr Bolger. He told the Canterbury division of the Society of Accountants last evening that whatever the Government might think, "free market forces” simply did not exist in world trade for many of New Zealand’s exports. The average sheep and beef farm’s average gross income for 1985-86 would decline 21 per cent. After allowing for 15 per cent inflation in farm costs and a reduction of 23 per cent in goods and services bought, the net farm income was estimated to fall 53 per cent to $13,900 a farm. It would be the lowest income in real terms for at least 25 years, and was 50 per cent lower than the previous real low point, Mr Bolger said. It was popular now to dismiss agriculture as of little importance but, in fact, the agricultural sector as a whole — from transport through to processing — was second in size only to the service sector of the economy. It contributed 17 per cent to New Zealand G.D.P. and provided employment for 19 per cent of the work force, he said. Sheep and beef farmers’ net incomes this year in real terms would be only about 40 per cent of 1977 incomes. If the Labour Government were prepared to have sheep farm net incomes — and there were often two owners of a farm — less than the wage increase of many State servants, it would have equal indifference to the harm any doctrinaire approach might cause manufacturers. Many manufacturers now exported at a loss in an endeavour to hold on . to markets, Mr Bolger said. If they walked away from these markets, which they would have to do with present econSjnic

policies, these markets would be lost to New Zealand for a long time. The battle between New Zealand and producers in the developed world was also unequal because of the Government’s economic policies, he said. No other manufacturing sector had to work within New Zealand’s incredibly high interest rates, associated high level of inflation, and high Government charges, he said.