PROGRESS LOAN

Press, Volume XCIV, Issue 28130, 20 November 1956, Page 14

PROGRESS LOAN

£1,400,000 NEEDED IN FOUR DAYS BROADCAST ADDRESS BY MR WATTS (New Zealand Press Association) WELLINGTON. Nov. 19. Up to the close of business this afternoon, subscriptions to the Government’s progress loan of £5,000.000 were £3,610,000. leaving £1.400,000 to be subscribed in the remaining four days to fill the loan, said the Minister of Finance (Mr J. T. Watts) in a national broadcast address this evening. Mr Watts said that in the last few years the Government had set out deliberately on a policy of developing the country's material resources and so improve the comfort, orosperity, and security of all. The Minister, who returned to New Zealand a fortnight ago from a conference of Commonwealth Finance Ministers in Washington and from discussions with financial authorities, both government and private, in the United States and London, said he found an exuberant, bustling, expanding economy in the United States, and that in the United Kingdom the people were working hard and just starting to enjoy some of the fruits from their struggles to overcome many shortages caused by their sacrifices during the war.

If it had not been for the Suez conflict, Mr Watts said, he felt sure the position sterling area balances would have improved considerably. He had returned to New Zealand convinced that the financial policies being followed by the Government were sound and well conceived, and generally were doing what was expected of them —to maintain a high degree of stability in the internal economy and to bring about a, balance in export income and import expenditure.

Production of both primary produce and manufactured goods was rising in many countries, he continued. They were all seeking new and expanding markets. There was more competition, and New Zealand must continue to be able to sell her primary produce at competitive prices. In both the United Kingdom and the United States the pressure of development had created financial problems similar to those experienced in New Zealand. The demand for capital moneys was exerting such pressure on available funds that, to curb inflationary tendencies, monetary measures on lines very close to New Zealand’s had been necessary. In the last two years there had been a substantial increase in rates of interest generally, and money overseas was becoming dearer. “Strenuous Effort” Needed It was therefore now even more important that New Zealand follow sound financial and monetary policies, said Mr Watts. What had to be guarded against was any feeling of complacency or any thought that the good things the people enjoyed could continue without strenuous effort. “There is very little chance of making any further economy in the capital works programme.” he said. “The labour situation is now a little easier than it has been for some time, and the rate of expenditure on Government work reflects this fact, because it means that Government capital work does not now take as long to complete as it took a year or two ago. when many contractors were taking on more work than they could manage.”

Mr Watts said he was pleased with the continued improvement jn small savings. “If this continues, and I believe it will, our over-all position will be improved accordingly.” he said.