National split on policy

Press, 5 March 1987, Page 1

National split on policy

By

BRENDON BURNS

in Wellington

A future National Government’s exchange rate policy became the subject of a public split yesterday between its former leader, Sir Robert Muldoon, and the party’s finance spokesman, Mr George Gair.

In a lunchtime address, Sir Robert said it was already announced National Party policy that the party would move to a managed float of the dollar.

Mr Gair, hearing of the address from journalists before it was given, asked Sir Robert to delete the reference to a managed float, as he said it was not party policy.

Sir Robert gave his address as written, and said the policy had been decided at a caucus meeting last May. Since then, he said, the associate spokesman on finance, Mr Michael Cox, had announced it in a reported address late last year.

Mr Cox has denied this.

Mr Gair, who is Acting Leader of the Opposition while Mr Bolger is in Britain, was not prepared to confirm that a managed float had been adopted by the National caucus, as Sir Robert maintained.

He agreed that at the May caucus meeting, consensus had been reached on policies in case of a

snap election and an interim paper had been drafted.

“The word ‘managed’ does appear in it but not as a principal objective at all. It is sort of incidental to the paper.”

Mr, Gair indicated that a managed float was no longer favoured.

Sir Robert was adamant last evening that a managed float had been adopted as policy, was released by Mr Cox, and would still have majority caucus support. Sir Robert said few in caucus would not support a managed float. “I think there might be two — Hansel and Gretel (Mr Simon Upton, Raglan, and Miss Ruth Richardson, Selwyn). There could

be more but they wouldn’t be people with any real economic understanding.

National sources indicated last evening, however, that majority thinking had switched from a managed float. A float was seen as costing much money in allowing the Reserve Bank to intervene and having reactive effects in other areas of the economy.

Some National members of Parliament said that Sir Robert was clearly trying to influence policy.

It is the second time this year that he has clashed with Mr Gair. In his annual address at Orewa in January, Sir Robert said that no Government could ignore

the need for controls on capital flowing overseas.

Mr Gair was moved to respond that “the reactive course of negative controls” was not needed.

Asked yesterday if Sir Robert was attempting to influence policy on the exchange rate, Mr Gair said that could be inferred.

“I must leave you to draw such conclusions as you wi11... I don’t wish to speculate on Sir Robert’s motives.”

Mr Gair said he was sure Sir Robert was a person who knew what he was doing.

The issue had been referred to Mr Bolger, he said.