Indicative Planning

Press, Volume CVI, Issue 31082, 10 June 1966, Page 10

Indicative Planning

This year’s Economic Review (reported elsewhere in this issue) is in two parts; in addition to the usual survey of the New Zealand economy there is a section on “ Planning and Government ”. The inclusion of this new section in an annual publication which traditionally reflects official opinion on the eve of the Budget is of some significance. The cynic might claim that its main significance is political—an attempt, in election year, to spike the Opposition’s guns—but the developments reviewed and predicted in the section cannot so lightly be passed over. An economic planning unit recently established in the Treasury “ reflects the intention of Government to formulate “ the probable expenditures and revenues of its own “ departments and corporations over a longer period “ ahead than at present ”; and the unit will co-operate with other institutions to promote more “ long-range “ thinking about the economy ”.

In short, the Government recognises the importance of planning—not the authoritarian planning of Communist regimes but the “ indicative “ planning ” practised, for instance, by France. “ Some “ of the techniques of indicative planning . . . can be “ adapted fruitfully to New Zealand’s problems ”, the Government admits. A cautious move in this direction was made with the establishment of the Agricultural Development Conference in 1963-64. “ Targets ” were set for the growth of the economy, the expansion of exports, and the annual increase in livestock numbers. Some of the implications of these “ targets ” have also been examined: the capital requirements of the programme have been estimated, forecasts made of fertiliser requirements and killing capacity, and so on. The “ planning ” in this field stops well short of compulsion: in fact, it stops far short of the measures adopted, in France and elsewhere, to ensure the fulfilment of their plans—more detailed planning, closer definition of objectives, more positive action to eliminate bottlenecks, and more specific listing of priorities. Perhaps similar measures are not envisaged in New Zealand; but even if they are held not to be necessary here it is idle to talk of “ the need for more “ planning ” in New Zealand until much more is known of the basic relationships among the various sectors of the economy. The Economic Review acknowledges that greater attention should be devoted to economic research and expresses the hope that much of this research will take place in the universities and in private research organisations. The Monetary and Economic Council brought down a special report more than two-and-a-half years ago on the need for improved statistics. Adequate statistics, the report said, “are indispensable tools " without which Government and business cannot “ carry out their accepted tasks of trying to make the “ economy achieve a steady rate of growth of real “ income ”. The two annual reports of the Government Statistician issued since this special report show that the improved statistics needed for better planning are not yet being produced, and will not be produced until shortages of expert staff in the department are overcome. The provision of an adequate number of skilled economists and mathematicians for the department is a necessary prerequisite to sound planning. When the Government authorises these appointments it will have proved its sincerity in advocating planning, and demonstrated its understanding of the techniques of planning.