EXCHANGE RATE.

Auckland Star, Volume LXX, Issue 88, 15 April 1939, Page 10

EXCHANGE RATE.

WILL NOT BE RAISED.

W.E.A. LECTURER'S VIEW.

The raising of the exchange rate by the Government was not considered likely by Mr. C. G. F. Simkin, lecturer in economics at Canterbury University College, in an address to the Workers' Educational Association. Mr. Simkin reached this conclusion because such a move would antagonise manufacturers at a time' when the Government considered this specially undesirable.

Mr. Simkin was discussing the economic outlook for New Zealand in the coming year. The decline in sterling funds, only a part of which could be accounted for by normal charges in overseas payments, was a serious one, he said. For reasons of security the funds should be built up to £15,000,000 as soon as possible.

The Government's import restriction scheme; said Mr. Simkin, had failed to increase the fund. The decline in the imports of finished grade had been more than counterbalanced by the increase in the import of raw materials and machinery, so that there had been an increase in aggregate imports. As it was unlikely that local industries could expand sufficiently in the coming year to provide all the goods which had been excluded, a fall in the standard of living was to be expected.

A decline in the income from exports was likely this year, he said. This was not alarming, and a revival in export incomes might be expected next year, but it would lead, nevertheless, to a fall in money incomes and in the standard of living. Revenue prospects were likewise unpromising, and with rising expenditure deficits were to be expected unless taxation was increased. It was more probable, however, that the Government would meet the difficulty by the use* of internal loans.