Inflation fight ‘harder than necessary’

Press, 19 July 1989, Page 4

Inflation fight ‘harder than necessary’

By

OLIVER RIDDELL

in Wellington

The politicians have made New Zealand’s battle against inflation harder than it need have been or should have been, according to the president of Federated Farmers, Mr Brian Chamberlin.

He was speaking to the federation’s annual conference in Wellington yesterday. During the battle it had become abundantly clear that farming and other efficient export industries had been carrying a huge load — bigger than anyone had ever imagined, he said. The cost of internal protectionism and totally inefficient processing, transport and service industries had bled the export industries white, Mr Chamberlin said. The cost to farming had been well over $lOOO million a year, and even now was close to $lOOO million. “But here we are, on the verge of success and inflation is down,” he said. “We have been through incredible pain, much of it unnecessary, to get there. “We will not surrender the hard-won ground,” Mr Chamberlin said. “It would be disastrous for New Zealand if we did.” The last few years had

proved beyond all doubt that farming was far more internationally competitive than any other New Zealand industry. Those industries meant to replace it were either bankrupt or calling for increased Government assistance or protection on top of what they were receiving already, he said. Only 5 per cent of the Bank of New Zealand’s bad debts had come from the farming industry.

“When one considers how much pressure farming has been placed under, this is an amazing performance,” Mr Chamberlin said. It was encouraging that the rural revival in recent months was not just financial. The spirit was coming back. The way in which people from one end of the country to the other had rallied behind the federation’s interest rate campaign was fantastic, he said. They knew they were fighting for a just cause. They were sick of the weak excuses and platitudes that had been offered as reasons for the high rates. Mr Chamberlin said farming was on the point of recovery. The country could use its farming industry to capitalise on low inflation and new market opportunities, or it could go backwards into the abyss of inflation and increased debt, hoping future generations would be able to pay the bill.