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THE NEW ZEALAND GAZETTE

No. 26

meat and most other primary exports. At the same time, inflation in
the industrial countries continues to increase the prices New Zealand
must pay for essential imports. This deterioration in the terms of trade
has reduced the real income of the community. Activity is being maintained
only by using our international reserves and replenishing these
by heavy overseas borrowing; however, the present level of borrowing
cannot be sustained.

The Government will be pursuing policies designed to adjust the
economy while we improve our trading position. The present situation
requires a reduction in expenditure on imported goods to help offset our
lower export earnings. In the coming year wage and fiscal policies will
be important in not only determining levels of remuneration but also in
spreading the burden of adjustment throughout the community. The
Government will shortly outline further steps it intends to take and
will continue to seek the co-operation of all in these troubled times.

The policies of the Government will be designed to meet the challenges
ahead in an equitable manner as well as enabling all New Zealanders
to lead full and satisfying lives. These twin objectives can be attained
only by having faith in New Zealand's future, by working together and
by avoiding self-indulgence and wasteful and divisive practices—in
short, by exercising restraint and commonsense.

Every New Zealander should be able to enjoy a just, humane, and
culturally rich society to which all sections of the community contribute
in security, freedom and dignity. Provision for the highest possible level
of employment and an acceptable standard of living for all our people
continues to be the goal of the Government.

New Zealand cannot live in isolation. Its well-being depends greatly
upon the achievement of a sane and fair international order. The
Government, following its own independent judgment and in cooperation
with others, will work for an international community which
enables all peoples to achieve their reasonable aspirations. New Zealand
will continue to support a more effective role for the United
Nations. It will continue to seek and promote a treaty to ban all nuclear
tests and for other measures to control and eventually eliminate
weapons of mass destruction. It will pursue its attempt to secure
agreement on establishing the South Pacific as a nuclear-free zone.

The Government reaffirms its belief in the need for well trained and
effective armed forces able to help the civil community—whether in
New Zealand or overseas—and to contribute to United Nations peacekeeping
operations.

As a Pacific nation, New Zealand must accord priority to its immediate
neighbourhood. The Government will continue to give special attention
to the needs and aspirations of the island peoples of the South Pacific.
It is ready, in partnership with their Governments, to embark upon
further initiatives to strengthen regional co-operation in transport,
trade, industrial development and other fields.

New Zealand will seek new and wider areas for co-operation with its
Asian neighbours. It aims to establish a firm basis for political and
economic consultation.

In its determination to seek out new relationships in every part of our
changing world, the Government has established improved links with