IMPORT CONTROL REJECTED

Press, Volume XCVII, Issue 28774, 20 December 1958, Page 20

IMPORT CONTROL REJECTED

South Africa’s Alternatives

Faced with the need to reduce overseas spending, a state of affairs with which New Zealand is familiar. the South African Government controlled the level of bank credit by the Reserve Bank requiring an additional deposit of 4 per cent, of their liabilities from trading banks; they reinstituted control over the overseas investments of Union residents; they tightened control over borrowings by local authorities; they severely pruned the estimates of expenditure by Government departments. In rejecting the use of import control, the Minister of Finance made some comments of particular interest to New Zealand at the present time, says “Live Lines,’’ the journal of the Electrical Supply Authorities’ Association in New Zealand. He said: “While import control may well at times and under exceptional circumstances be necessary to bridge the gap until the more fundamental measures can have the desired effect, it cannot permanently solve the Union’s problems, but can only suppress them at the risk of rising costs and prices. Apart from these considerations, the Government could not ignore the changed international attitude in regard to import control. “A few'years ago import control was still fashionable, but today it is widely regarded as a stop-gap to which resort is taken by Governments which are either unable to appreciate the long-term harmful effects of quantitative restrictions on imports, or lack the courage to introduce more fundamental measures designed to remove the real causes of the disequilibrium in the balance of payments.

“In these circumstances exclusive reliance on import control casts a reflection on a country’s credit standing and under present conditions both the International Bank and the International Monetary Fund look with disfavour on the intensification of import control for the solution of balance of payments problems.”