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Graphic: An Encyclopaedia of New Zealand 1966.


This information was published in 1966 in An Encyclopaedia of New Zealand, edited by A. H. McLintock. It has not been corrected and will not be updated.

Up-to-date information can be found elsewhere in Te Ara.



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New Problems

The 1950s have seen a more anxious time for New Zealand. Since the Korean boom of 1950–51, the terms of trade have fluctuated considerably, but on the whole have moved unfavourably for New Zealand – as for many other primary producing countries. A specific cause of concern has been the continued protection of agricultural produce by most industrial nations. Pastoral production has continued to increase, somewhat irregularly, but by the early 1960s there were signs that the expansion induced by aerial topdressing had perhaps nearly run its course. Whether a further technical advance of comparable significance may be in the offing can scarcely be predicted, though the work of New Zealand's agricultural research workers suggests that there are, in fact, still considerable gains to be made even within the traditional pattern of grassland farming: the more systematic use of artificial insemination, and the more widespread inclusion of trace elements in the fertilising programme, are two of the more obvious possibilities.

Meanwhile, the expansion of manufacturing industry has proceeded apace, stimulated by the continued inflation which has been one of the chief causes of concern in recent years, and by conscious manipulation of the machinery of import controls which also serves, though not without many fits and starts, to restrain the demand for imports within limits which the balance of payments can tolerate. Over the period 1938–39 to 1956–57, the volume of manufacturing production expanded by 153 per cent and the number of factory employees now substantially exceeds the number engaged in farming.

These developments have served to intensify the trend, which has been apparent for at least 90 years, for the composition of imports to change: producers' equipment and raw materials and semi-processed goods for working up in New Zealand's own factories are more and more replacing finished consumer goods. Nor has this manufacturing development been confined to the light consumer industries, of which, save for the processing of her primary products, New Zealand manufacturing had previously chiefly consisted. At the beginning of the 1960s construction had started, or plans had been agreed upon, for a scrap steel mill which it is hoped will be the precursor of later development of New Zealand's ironsands; for an oil refinery; and for a £200 million installation using part of the South Island's great reserves of hydro-electric power to smelt Australian bauxite for aluminium production. One major success of the past decade has been the expansion of forestry products, based on the huge plantations of exotic trees in the North Island, which has added a modest but welcome diversification to the pattern of New Zealand's exports – the more so since these products are largely exported to Australia, thus helping to reduce the percentage of exports going to Britain. In 1959, exports of forest products accounted for 2.8 per cent of all exports.


(1) Census figures for all years except 1931 and 1941 (figures up to 1921 slightly revised from originals to conform with modern census definition of Maori). For 1931 and 1941, estimated population at end of year.

(2) F.o.b.

(3) C.d.v. + 10 per cent.

(4) Year 1900–01, etc.

(5) Enumeration taken September 1857 to September 1858.

(6) 1903.

(7) 1936.

(8) Excludes armed forces overseas.

Despite such developments, the rate of growth of real income per head during the 1950s has been substantially lower than that of most Western economies, and this notwithstanding the investment of something between 20 and 23 per cent of the national income in capital formation. It seems evident that in the future the performance of the economy will be much more closely bound up than it was in the past with the productivity of manufacturing industry; and in this respect New Zealand's relative paucity of mineral resources, the small size of the local market and of the average plant, and a structure of taxation, controls, and social services which, at best, does not seem particularly congenial to the determined pursuit of high productivity, have all caused much heart searching in recent years. Yet the New Zealand community undoubtedly enjoys one of the highest standards of living in the world, and the continued flow of immigration and high rate of natural increase of population which have been features of the post-war years, suggest that there are many people both within and without the country who have faith in the future viability of the New Zealand economy.

by John Dennis Gould, B.A.(LOND.), M.A.(BRISTOL), Professor of Economic History, Victoria University of Wellington.

  • New Zealand in the Making, Condliffe, J. B. (1959), and The Welfare State in New Zealand, Condliffe, J. B. (1959)
  • The Instability of a Dependent Economy Simkin, C. G. F. (1951)
  • Economic Changes of a Quarter Century, Sutch, W. B. (1959)
  • A History of New Zealand, Sinclair, K. (1959).