Palmer, Caygill ‘fantasising’

Press, 29 December 1989, Page 5

Palmer, Caygill ‘fantasising’

The Prime Minister, Mr Palmer, and the Minister of Finance, Mr Caygill, are fantasising if they promise a "brave new dawn” for New Zealand’s economy, says the Opposition spokesman on Trade and Industry, Mr Philip Burdon.

He was, commenting on the release of a survey which reported a continuing fall in business confidence. The latest National Bank Business Outlook also showed that inflation expectations were rising while investment intentions remained depressed. The outlook for the retail sector was deter-

iorating and manufacturing was vulnerable. The survey blamed the drop in confidence on "negative” business news, a slump in retail sales after the rise in GST, increases in producer costs and a poorer environment for interest rates. Mr Burdon said the survey confirmed what everyone knew to be the reality. The productive sector clearly had no confidence or optimism in the Government’s ability to manage the economy. More optimistic remarks from Mr Palmer and Mr Caygill were irrelevant, he said. Both Ministers were “out of

touch” if they predicted that New Zealand’s economy was moving into a growth phase. “Clearly the Government has got to restore commercial confidence and be seen as committed to encouraging the productive sector,” said Mr Burdon.

This would require a commitment to remove confusion over the introduction of a capital gains tax and the “equivocal” attitude to labour market reform.

He said there was no evidence that the Government had the courage or the conviction to make hard decisions to address the areas of failure.