✨ Government Economic Statement
1350 THE NEW ZEALAND GAZETTE No. 38
As a nation we have to live within our income over the longer run—
the remedies are in our own hands.
The New Zealand economy continues to face difficulties. These result
from the slowness of the world's recovery from depression since 1975
and from continuing international inflation which, together, have
caused a major deterioration in our terms of trade. As a consequence
we have suffered a large drop in national income, which is now having
an effect on the domestic economy.
The Government has acted to solve the country's economic problems.
The high balance of payments deficit has been reduced and the
growth of expenditure on imports has been retarded considerably.
With the balance of payments on current account still in deficit the
Government will be obliged to continue to control tightly the total
quantum of imports.
Imported inflation and domestic wage and price increases have
developed a strong momentum. The Government has therefore
applied a wide range of policies to cope with the problem including
price regulation and fiscal and monetary restraint. It is now clear that
these policies are succeeding. While still high, the rate of inflation is
falling and further improvement is expected. The Government regards
a higher rate of productivity as an important means of reducing
inflation and will continue to encourage efforts in this direction.
The Government is firmly committed to a policy of controlling
inflation and reducing the balance of payments deficit. These are the
priorities. Without them a permanent strengthening of the economy
cannot be achieved.
Over recent months a major difficulty has been the drop in domestic
activity and increased unemployment. The Government has moved
promptly to minimise the effects of this cyclical downturn. Policies
are now in train which have increased the money supply and have
boosted direct Government spending in the weaker sectors of the
economy. The business community can now look forward to improved
demand and can take confidence from the Government's preparedness
to sustain activity.
While unemployment has become a growing problem the policies of
economic stimulation pursued by the Government have been instrumental
in controlling its growth. In addition the Government has
made special work available and assisted local authorities and private
employers to take on additional workers. The emphasis is on retraining
to diversify and improve the skills of the labour force. This is a
necessary part of the economic restructuring.
The Government has successfully introduced a system of free wage
bargaining, and the round of wage negotiations through the summer
was the first for several years. Difficulties which might have occurred
were largely avoided and in general reasonable settlements were
reached.
The integrated system of wage settlement tribunals which was
enacted at the last Session is now in place. While the main emphasis
in wage determination will remain on conciliation, the Government
trusts that the new Arbitration Court and its associated tribunals will
quickly gain the respect of all parties in cases where it becomes
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VUW Te Waharoa —
NZ Gazette 1978, No 38
NZLII —
NZ Gazette 1978, No 38
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🏛️ Government Statement on Economic Policies
🏛️ Governance & Central AdministrationEconomic Policies, Inflation, Unemployment, Balance of Payments, Productivity, Wage Bargaining, Economic Stimulation