Govt will have to move to hold unemployment—P.M.

Press, 30 June 1983, Page 8

Govt will have to move to hold unemployment—P.M.

PA Wellington New Zealand would end up with a very high level of unemployment if the Government took advice contained in the latest O.E.C.D. survey of the economy, said the Prime Minister, Mr Muldoon, last evening. The Government would have to move to hold unemployment, he said when commenting on the survey at a press conference. Mr Muldoon said his Administration would have to put a brake on improving trade figures to boost employment. “We are going to have to slow down this improvement in our external current account and turn it into a hold on unemployment,” he said.

The Government says an extra $1 billion should now come in the next year through improved export prices and reduced imports.

The report predicts that registered unemployed numbers will reach 8.2 per cent of the workforce in two years, or 112,587 people. Mr Muldoon said, “The O.E.C.D. does not have to worry about unemployment. I do. They are employed, full-time, on a good contract.”

The survey said a big problem in the medium term was reducing the current external deficit, but Mr Muldoon said, “You can only get people into jobs in this country by having, for example, a larger external deficit.”

“If they suggest we were to rapidly lower our internal deficit, again we would be creating more unemployment.”

Mr Muldoon said the Government would change its policies, and noted that every prediction made by the report “is in the context of no change in policy.”

He said the report was the same as advice received from the International Monetary Fund — “they are looking at collecting statistics rather than getting people into jobs.” Asked what value there was in the report then, he laughed and said, “It’s a good question. It’s a point of view our own advisers can look at.” But Mr Muldoon said a good deal of the statistics were already well out of date, these being “the end-of-last-year type of statistics.”

Criticisms in the report that Government policy reaction had mostly been too late or too large were rejected by Mr Muldoon, who said it was “being wise after the event.”

Treasury officers had made representations to the O.E.C.D. to have a draft of the report changed, saying it contained inaccuracies.

Asked if the inaccuracies had been taken out of the final report, Mr Muldoon said he had not read it closely enough to know.

Labour’s spokesman on finance, Mr R. O. Douglas, said the report showed that the Government did not know what it was trying to do in running the economy, “let alone how to do it.”

“The O.E.C.D.’s prognosis is for continued gloom — falling living standards, rising unemployment, continued internal and external deficits,” Mr Douglas said. Labour’s spokesman on employment, Mr Peter Neilson, said that if the present policy continued and not one more person was added to those at present on jobcreation schemes in two years it would produce a total of 147,176 either registered unemployed or on jobcreation programmes.