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Salient. Victoria University Student Newspaper. Vol 35 no. 10. 24 May 1972

Takeover New Zealand

Takeover New Zealand

Since 1950 New Zealand, while diversifying into manufacturing, hat confirmed her colonial economic status Since 1960, in finance, commerce industry, transport and land, foreign control has accelerated; in these sectors by the early 1970s, supranational interests in North America, Europe, Australia and Japan had materially strengthened their hold. How and why this has happened and how the trend could be reversed is the subject of this book.

The publication of Dr Sutch's new book Takeover N.Z. is not going to lessen his unpopularity with the National Party and present Government circles. W.B.Sutch sees New Zealand's present economic difficulties, as resulting from the reversion of successive National Governments., from the 1935-1949 Labour Government's semiplanned economy, to the laissez-faire economics of the 1920's. These laissez-faire economics moreover contributed greatly to the hardships suffered by New Zealanders during the Depression.

Takeover N.Z. will probably not endear Dr. Sutch to the Labour Party either, for he claims that the 1935 Labour Government, by altering the "free-market-economic system", could have rescued N.Z. from its present economic and political colonial status. By waiting 3 years before instituting selection of imports and by not pursuing a strong manufacturing development policy, the Labour Government of 1935 muffed its chance of making N.Z. a self-sufficient economic unit. Dr Sutch claims that there was no attempt by the Labour Government to use the Trade Union movement as a force to establish a permanent N.Z. owned manufacturing industry. This was not done until the Labour period of government 1958-60. He does concede, however, that this period of Labour Government paved the way for N.Z's present diversified manufacturing.

Takeover N.Z. 's thesis is that N.Z.'s present colonial status results from the "original colonial status of the economy with its emphasis on grassland and livestock specialisation and lack of sufficiently stron political pressures to build a largely N.Z. owned manufacturing sector. "It then follows that, the increasing foreign control of recently developed N.Z. industry comes from attempts by these foreign interests to protect their N.Z. market. These interests, when told by the National Bov-ernment that N.Z. couldn't afford to import their products, decided to make them here.

They are, according to Takeover N.Z., quite often combined into supranational industrial and financial organisations, which can control a country's economic development. At the moment there are at least 30 supranational industrial concerns (not counting financial organisations) operating in N.Z. For instance, 54% of Tasman Pulp and Paper is owned by 3 of the supranationals, and 60% of the Marsden Point Oil Refinery is owned by the oil supranationals.

Further, N.Z.'s largest industry, life assurance, is almost completely foreign controlled, much of it associated with supranational banks. This means, that the Government has little control over N.Z.'s largest single group of fixed asset holders, and has resulted in investment, by the life offices, in the public sector falling from 71% to 28% since 1949. Dr Sutch claims that this decrease in public investment is one of the most important developments in the history of N.Z.'s economy. It is one explanation for the deterioration of N.Z.'s Social Services and the lack of investment in manufacturing and farm diversification.

In the last decade of National Government rule, Dr. Sutch asserts that foreign finance together with supranational industry has extended its power in N.Z., and has the ability to control the overall direction of industry and the economy. This development is documented in awesome detail throughout the book.

In his conclusion, Dr Sutch maintains that if N.Z. controls investment in the N.Z. economy, it can decide what parts of the economy should be owned and controlled by New Zealanders, and thus be under parliamentary control. His analysis in this section, of how the N.Z. Electorate could influence a political party to reverse the foreign control of the N.Z. economy, could have been more detailed. 'Despite this, Takeover N.Z., will probably be the most important book on N.Z. politics to be published in this election year.