Sir Wallace criticises Govt

Press, 13 September 1988, Page 6

Sir Wallace criticises Govt

PA Wellington The sale of State assets was causing a misdirection of investment capital and should be stopped, a former Labour Prime Minister, Sir Wallace Rowling, said last evening. Delivering the inaugural Joe Walding Memorial Lecture at Massey University, he said the free float of the dollar was a mistake, the scalpel used to remove subsidies was wielded with more enthusiasm than caution, and some areas should have been exempt from application of the userpays philosophy. Sir Wallace accused the Government of abdicating its responsibility and allowing unnecessary pain and damage. “The Government must focus its attention on the country’s production base, it should cease to divert investment capital into the acquisition of existing State assets, it should not be afraid to direct financial support to industries where this provides job opportunities and a measurable impetus to output, and it should continue its already strong leadership in breaking down trade barriers,” Sir Wallace said. The free float of the dollar, was an abdication

of control of the currency. Associated with deregulation of exchange controls and decontrolling interest rates, it was an invitation to currency manipulation, he said. He advocated a control which allowed the Government to combat crises when they arose but which would not of itself create the kind of difficulties and uncertainty a free float could obviously generate. • Sir Wallace also said New Zealand’s determined anti-nuclear stance had caused only one confirmed trade problem in the United States in three, years. The Government had been subject to a good deal of criticism about aspects of its foreign policy, but little of the criticism would stand close scrutiny.

“During my time in Washington I observed that a number of New Zealand entrepreneurs were claiming through the columns of our newspapers that they had suffered loss of business as a direct result of New Zealand’s determined antinuclear stance,” he said. “Most of those reports were garbage —. certainly if related to the United States..market.”