13 MARCH
THE NEW ZEALAND GAZETTE
449

Cook Islands, Niue, and the Tokelau Islands. It will give full support
to efforts to strengthen the South Pacific Commission as an instrument
for regional co-operation and the assistance to the new regional
University of the South Pacific in Fiji will be maintained.

It gave me particular pleasure to welcome my Prime Minister along
with other Commonwealth leaders when they held their meeting in
London in January 1969. This was a memorable occasion coming
at the end of a decade that has been a significant period in the
evolution of the Commonwealth. The membership of the Commonwealth now represents some quarter of the world’s population. My
Ministers believe the potential of the Commonwealth as an instrument
for good will, mutual respect, understanding, and accommodation in
the international community is yet to be fully explored. Throughout
its history it has remained faithful to the characteristics that make it
unique: a group of nations, associated by their free choice and
welded together through a common heritage and through a profound
belief in certain fundamental values. At the same time it has consistently demonstrated its capacity for renewal and growth to meet
changing circumstances. The vitality of the Commonwealth concept
is amply reflected in the large and growing number of organisations
that bring together professional people, administrators, and private
individuals throughout the Commonwealth. My Government looks
forward to the continuing extension of areas of practical co-operation.

Honourable Members, over the last 2 years the balance of payments
situation has been greatly strengthened and this is reflected in the
record current account surpluses of recent months. The recovery from
the external payments problems faced in 1967 and 1968 has been
assisted by the rapid growth of overseas exchange receipts both for
traditional exports and for new products from New Zealand’s
increasingly diversified economy.

There has been a rapid recovery in domestic output and incomes.
Recently however the rate of increase of expenditure has been
causing some concern to my Government. Evidence that this rate
of acceleration is too fast can be found in the unsatisfied demand for
labour and in the increasing pressure on costs and prices. My
Ministers believe that while fluctuations in the level of activity within
the economy are inevitable it is necessary to ensure that they are
kept under control. Without such control the conditions favourable
to balanced economic growth may be replaced by an inflationary
situation in which an efficient and internationally competitive
economy cannot flourish. My Government is determined that the
progress made in recent years to strengthen the economy will be
maintained and its decisions in the field of economic policy will be
made with this basic consideration in mind.

My Ministers intend to make further progress in implementing the
major long-term economic policies formulated by the National
Development Conference. A fundamental objective is the further
diversification of the New Zealand economy. The dairy industry beef
scheme was introduced by my Minister of Agriculture last year to
encourage the greater production of beef, for which there is a growing
export market, at the expense of milk production, of which there is
a world surplus. My Ministers are confident that the proven capacity
of the New Zealand farmer to respond to the changing requirements
of international markets will ensure that agriculture will continue to
play a major role in the New Zealand economy.

Industrial development has made further significant progress during
the past year. The foundations of a great new industry are being laid
with the production of steel billets from New Zealand ironsand. In