Economy Steadying, Says Mr Holyoake

Press, Volume CVI, Issue 31083, 11 June 1966, Page 18

Economy Steadying, Says Mr Holyoake

(New Zealand Press Association) NEW PLYMOUTH, June 10. Heavy capital investment had caused an inevitable pressure on overseas funds, and this was the Government’s most difficult problem, the Prime Minister (Mr Holyoake) said at New Plymouth tonight.

Addressing the annual meeting of the Wellington division of the National Party, Mr Holyoake said there was a spirit of

confidence abroad on New Zealand’s future which had resulted in the economy running slightly too fast. The present policy of the Government was to steady the rate of expansion. Policies of restraint had been adopted, though not in the export field, and the economy was steadying down without any shock. “However, if things are a bit too fast, it is better than that they be a bit too slow,” Mr Holyoake said. The time had come in the life of the Government for a review and a stocktaking, he said. The National Party had been in power for 14 of the last 17 years. “There are problems, of course, but they are the problems of growth and progress, not the problems of stagnation,” said Mr Holyoake. New Zealand was undergoing the greatest expansion and development in its history. Fertiliser output had increased 50 per cent in three years and had doubled in 10 years. Farm machinery imports had increased last year by £sm and had put farming in its proper place again. The growth in production, in manufacturing, in the servicing industries and in population—it was 2.5 per cent and had steadied to 2.2 per cent—had inevitably resulted in expansion in Government spheres, said Mr Holyoake. Education expenditure had increased from £43m to £7lm in the last five years, defence expenditure had increased from £29m to £4Bm. The railways had been modernised, and would this year show a profit of £2m, he said. Well over £loom had been spent privately and by the Government on television in New Zealand in the last few years. In the last six years 17 new

commercial aerodromes had been opened throughout the country, said Mr Holyoake. Within the next nine years the people of New Zealand would have to double the generating power now available, he said. The immense power project at Manapouri would cost between £4om and £som, and with Tongariro the Government would spend £lsm more this year on power generation than last year. “This constant pressure resulting from expansion has resulted in a shortage of overseas funds,” said Mr Holyoake.

“But by prudent overseas financial policies the Government has £3om invested m London, which can be used at any time, in addition to the normal overseas funds in the international banking system. “It is my estimate that farmers are holding an additional £2om worth of stock this year which, because it has not been sold, has yet to earn overseas funds,” said Mr Holyoake. “We have gone to the International Monetary Fund for £22m to support our overseas funds -in this period of shortage until the investment of the farms comes in.”