Economic statement expected on Monday

Press, 17 May 1986, Page 2

Economic statement expected on Monday

By

MARTIN FREETH

in Wellington Farmers and manufacturers do not hold high hopes for the Government’s next big economic statement — the results of the recent expenditure review to be announced on Monday. The statement is expected to include Government spending forecasts for the next five years when State restructuring is intended to make substantial savings. Federated Farmers and the Manufacturers’ Federation, representing producers hurt by high interest rates and the strong Kiwi dollar, have constantly argued for drastic cuts in State expenditure as a key part of the remedy. The president of Federated Farmers’, Mr Peter Elworthy, said yesterday he awaited the

statement with “apprehension and perhaps some hope.” He said he agreed with the Government’s emphasis ort savings through greater efficiency, provided this did not simply mean heavier charging for the users of State services. The president of the Manufacturers’ Federation, Mr Keith Tyrrell, warned that the statement would show producers whether the Government was truly committed to its talk of cost-cutting and efficiency. Mr Tyrrell also warned against reshaping State trading enterprises, such as the Post Office, into corporations which could then hike their charges in order to boost their returns to the Government. The Opposition’s spokesman on expenditure, Mr Micheal Cox,

predicted the statement would be a “gigantic reshuffle” of debt servicing costs into State trading organisations. The Minister of Finance, Mr Douglas, indicated that the statement would not contain cost cutting across existing State activities but would project savings from some departments charging 1 more for their services and profits from newlycreated State trading enterprises. Mr Douglas has a goal of holding this year’s fiscal deficit to about 4 per cent of gross domestic product.

Asked if he wanted to eliminate the . deficit in future through State restructuring, Mr Douglas said: “That’s not really necessary, but ... given our debt servicing costs we really do have to get it down as low as we possibly can.”