DEVELOPMENT OF N.Z.

Press, Volume LXXXII, Issue 24914, 29 June 1946, Page 4

DEVELOPMENT OF N.Z.

PART OF SECONDARY INDUSTRY SHORT AND LONG-TEBM VIEWS (P.A.) WELLINGTON, June 2& Whatever part secondary industry was to play in the development New Zealand, we would always need large importations of consumer a™ l capital goods from overseas, said MT * • P. Walsh, representative of the Federation of Labour on the Economic Stabilisation Commission, in an to the National Dairy Conference. The continuation of national progress was dependent on an adequate flow of imported commodities and e«jS>Pment. . “We must realise that we dustrially speaking, a poor country, said Mr Walsh. “We have, foi^ x " ample, no minerals that are suited lor large-scale industrial developiflCnt, nor have we any nearby’ markeUto which we can export finished goods. Therefore we must be clear as to the part secondary industries are to F a y in our economy.” ■ Distinguishing between the shortterm and long-term situation, ( ;Mr Walsh said that in the short-terntwe appeared to have reached the posipon where our secondary industries wre afflicted by a manpower shortage,Jpo some might say we were getting oyerindustrialised m lines of goods whicn were selling at uneconomic price® m relation to imports, and which had no relation to our natural resources. But in the long-term view, the questioß relative prices was only one. factor, and the real test could not be inaae entirely on such grounds. “Of fundamental importance is the provision or employment for our rising population, and the problem is one of striking a balance between material resources and the labour available.” Sterling Balances Referring to the question of sterling balances, Mr Walsh said that although these appeared high, it was questionable whether they were adequate to meet all our requirements, were goods available to purchase overseas. This pointed to the need for continued control over our overseas funds, so that the most urgent and nationally important needs might be met first. Int<nal purchasing power, at its present high level, would exhaust our overseas; resources in a short time were import control to be removed. “In my report to the national council of the New Zealand Federation of Labour earlier this year,” said Mr Walsh, “I Stressed the fact that we have not unlimited sterling funds available for the purchase of imports. The funds which stood to our ciedit at the end of the war have already been considerably reduced by debt repayments, and I would draw attention to the fact that as part of sth e United States-United Kingdom Joan agreement, the United Kingdonl is called upon to approach her sterling area creditors, including New Zealand, with a view to achieving a downv»rd adjustment of sterling balances, held in London, and the virtual immobilisation of a large part of such balances. Such a procedure would make our supply position for imports even n|ore severe, and would emphasise the necessity for using our available funds to the best advantage. We cannot afford to reduce sterling funds available

for imports by further debt repayments. It stands to the credit of the Government that it has met the exier- * nal cost of the war in .full, but even j now voices are being raised in London ] suggesting that when future debts fall c due they should be met by conversion t operations. This is itself a tribute/to « the financial standing of our country. } In our present circumstances. I personally am in agreement with that s view, provided the conversion terms > are to our advantage.”