SUBSIDY ON GOLD NOT FAVOURED

Press, Volume LXXXIV, Issue 25638, 29 October 1948, Page 6

SUBSIDY ON GOLD NOT FAVOURED

STATEMENT BY MR NASH COMPANIES’ DIFFICULTIES ADMITTED (P.A.) WELLINGTON, October 28. There could be discussions on the question of granting an increase in <he price of gold or some form of subsidy, I but fie did not think it was desirable to subsidise the production of gold, said the Minister of Finance (Mr Nash), speaking on the Finance Bill in the House of Representatives last evening. Though gold meant dollars, there were other forms of production more worthy of a subsidy that could also yield dollars. Mr Nash said it was acknowledged that some gold-mining cpmparties would encounter difficulties now that the return to exchange parity had reduced the price of gold in New Zealand currency from £lO 15s 3d to £8 12s 3d an ounce. However, he thought the majority of companies would continue to operate profitably. The Waihi company might be forced out earlier than otherwise, but the Government would do everything possible to expand secondary industries and other activities in Waihi to provide employment for those displaced from the mine, said Mr Nash. One concern last month took 14 workers from the mine into other work. “Inferential Agreements” Mr Nash said gold producers had proposed to the Government either that it subsidise them or that they be allowed to sell all or part of their gold wherever they liked. However, there were inferential agreements between nations not to try to force up the price of gold or to allow its sale on what was virtually the black t market. It might be less harmful in the long run if some gold producers had to go out of business than if New Zealand did .something to upset international exchanges as they now operated. New Zealand must certainly do nothing injurious to the United Kingdom, and if the price of gold became too high there might be a risk that the United States would refuse to buy more gold, with serious effects on other countries. The Leader of the Opposition (Mr S. G. Holland) said the country now bad the spectacle of the Labour Government that said it was going to do everything for the mining industry resisting a plea to save it. In one breath it removed the export duty and in the next deprived the industry of the exchange benefit.