N.Z. dollar

Press, 18 February 1989, Page 24

N.Z. dollar

Sin—E. Oakley confirmed that inflation has prevented the farming community from gaining any sustained benefit from more than a decade of continually lowering the exchange rate (January 16) so it seems illogical that he should now argue for the exchange rate to be lowered by relaxing our main constraint on inflation, monetary supply (February 11). Might I suggest that, contrary to E. Oakley’s deduction, the real reason for the demise of our country is the 30 years of direct Government intervention through various regulations, controls, subsidies and trade restrictions which has so seriously misdirected our economy that we now have too many of the wrong industries inefficiently producing the wrong products for the wrong markets. Unfortunately, controlling inflation and freeing the markets are not in themselves sufficient to guarantee economic recovery. There also needs to be massive investment in both the restructuring of our productive industries and in market research and development. The question that

we should be asking ourselves is: “How is this investment to be funded?” — Yours, etc., ROBIN PAWSEY. . February 12, 1989.