BORROWING FROM OVERSEAS

Press, Volume LXXXIX, Issue 27051, 28 May 1953, Page 11

BORROWING FROM OVERSEAS

Development Funds For N.Z.

MR H. R. LAKE’S VIEWS

To develop properly' and cater for its expanding population, New Zealand would be faced in the near future with the need to borrow overseas, said Mr H. R. Lake, Government member of Parliament for Lyttelton, at the annual meeting of the Lyttelton branch of the New Zealand National Party. The only alternative to borrowing from overseas was a continuation of crippling taxation, which the Government was pledged to reduce, Mr Lake said. It was estimated that the population of New Zealand would be 3,000,000 by the early 1970’5, and planning was being undertaken for the necessary expansion. "A reasonable amount of overseas borrowing could be undertaken, because the export income of the country is sufficient to justify this, and the interest charge would be no burden," said Mr Lake.

Britain was unable to make funds available for the further development of New Zealand, he said, and the only alternative seemed to be that New Zealand should become, as quickly as possible, a member of the International Monetary Fuiffi. “A recent report from the director of the International Monetary Fund indicates that the resources of the fund are large enough to permit significant extensions of its activities,” Mr Lake said. "The director said, however, that any efforts of the fund would be frustrated if its members did not pursue internal policies that would diminish disturbances in their international economic relations. While welcoming the return of many countries to more cautious budgetary and monetary policies, he warned that it would be imprudent to assume that the risks of inflation could now be neglected.” Even if inflation was under control, the necessity for adjustments in world trade would always remain, said Mr Lake. An increased willingness on the part of the major importing countries to liberalise their commercial policies was an essential condition for the smooth adoption of these adjustments. “The Government places particular emphasis on a continued increase in primary production,” said Mr Lake. “Two countries which have not placed sufficient emphasis on this factor are Australia, from which exports of frozen beef have fallen off sharply as a result of the consumption of its growing population, and the Argentine, the population of which has increased to such an extent that this country is no longer a substantial meat exporter.”