RESERVE BANK CREDIT

Press, Volume LXXXIX, Issue 27089, 11 July 1953, Page 3

RESERVE BANK CREDIT

POSSIBLE USE FOR PUBLIC WORKS GOVERNMENT’S ATTITUDE CRITICISED (From Our Own Reporter) NELSON. July 10. “The complete silence of the DeputyPrime Minister (Mr K. J. Holyoakc) in regard to the recent announcement made by his colleague, Mr Webb, that the Government was prepared to use Reserve Bank credit to support this year’s works programme, must confirm the fact that the Nationalist Government has turned its back upon the financial principles it formerly professed to uphold,” said the DeputyLeader of the Opposition and member of Parliament for Buller (Mr C. F. Skinner), speaking at a public meeting at Pangatotara last evening.

“Along with the notorious promises to make the £ buy more and to solve the housing problem quickly, the Government has now abandoned its pledge to restore what it used to refer to .»■ ‘sound finance',” said Mr Skinner. “Apparently the retention of power is far more important than toe maintenance of political principles and for Mr Holyoake and his colleagues, expedience is openly the order of the day. “The public has not forgotten how on February 1, 1950, Mr Holland, in violently denouncing the use of Reserve Bank credit, said: ‘How did the country get into this unsatisfactory state at a time of full employment and record prices for our primary products? The answer is to be found in soaring Government expenditure.’ In 1949-50 the works programme was estimated to cost £35,268,000. Today, with the price received for our primary produce at much higher levels. Mr Webb asserts even with a reduction from £79,000.000 to £65.000,000. the Reserve ißank must be used to sustain the programme.

“Mr Holland also said: ‘New Zealand is living internally far beyond its income and is meeting the deficiency by the disastrous method of creating Reserve Bank credit.’ All of Mr Holland’s colleagues supported him in his contention and it is amazing to find such a prominent member of the Cabinet as Mr Webb now openly advocating that this ‘disastrous’ course should be adopted. “The public is fully entitled to a complete explanation of this change of front and thinking people cannot be blamed if they now condemn the former utterances of Nationalist members as deliberate humbug for the sole purpose of ensuring that the National Party was elected to power,” said Mr Skinner.