'N.Z. like Hungary'

Press, 18 April 1979, Page 15

'N.Z. like Hungary'

PA Wellington New Zealand has some similarities with the Eastern bloc state of Hungary, according to the Reserve Bank’s chief economist, Mr L. C. Bayliss. In an address to the Civil Service Institute, he said that similarities included excessive controls, regulations and bureaucracy with severe dis tortions in the price sys tern, a situation whic l present New Zealand po icy aimed to change. A Hungarian banke, was quoted as saying “We no longer havt ■wages, prices and profits, but wages, prices and sub sidles.’’ Mr Bayliss: "Thai is ibout as good a descripion of present-day New '.ealand as is possible.” Mr Bayliss, who insisted hat his views were not necessarily shared by his employers, said the only way to achieve growth of living standards and employment was to move towards a market forcesprices economy. He held that such an economic environment was not an attack on a caring society or the quality of life: indeed, it was essential for their attainment. Central and local government employed a quarter of the labour force, and used 28 per cent of the gross national product, or 45 per cent if subsidies and transfers were included, he said. But he conceded that a market-forces environment was not a solution for increasing efficiency and productivity in the nonmarket sector. Mr Bayliss called for effective internal financial management and control procedures in the public

sector and for Parliament to carry out its prime responsibilities. Three of the most important were to exercise effective scrutiny over the activities of Government departments, public corporations and Government spending. “Much has been written tbout the declining presige of Parliament —- urelv the best way of retaining its prestige is for Paliament and parlianentarians to do their job 'roperly,” he said. "But under present sysems it is difficult to see how parliamentarians can effectively discharge their responsibilities in regard

to judging whether Government departments and public corporations are performing efficiently and whether the public is receiving value for money.” he said. Mr Bayliss said that Parliamentary select committees should be much stronger, like those of the united States Congress. Discussing deficiencies tn economic policy formulation, he deplored the absence of an integrated economic strategy and held that the Cabinet Economic Committee suffered from having too little time to digest its papers, some of which were badly drafted.