VALUE OF MORE BANKS QUESTIONED BY MINISTER

Press, Volume XCVIII, Issue 28823, 18 February 1959, Page 7

VALUE OF MORE BANKS QUESTIONED BY MINISTER

(New Zealand Press Association)

NEW PLYMOUTH, Feb. 17.

“There have been suggestions from time to time that the establishment of municipal savings banks, or of savings branches of the trading banks, or of more .trustee savings banks, would yield substantially more savings, but I am..very doubtful whether increased savings would result from increased savings institutions,” said the Minister of Finance (Mr Nordmeyer) in his address when opening the annual conference of the Trustee Savings Banks’ Association of New Zealand in New Plymouth today. .

“I shall therefore await with very great interest the effect on savings in the area covered by the newly-established Waikato Trustee Savings Bank. It will be many years before a worth-while comparison can be made. If it can be clearly demonstrated that real savings have expanded, the

case for the establishment of other banks will have been greatly strengthened,” said Mr Nordmeyer. •‘But whatever our opinion may be on the value of this or that type of bank, 1 think there will be general agreement .. that the multiplication of institutions, ail competing for the same .quantity of savings, will of itself, accomplish nothing—except to add to he expense of collecting, mobilising, and using them. What is needed is an increase in the quantity of savings, a development of the savings habit, a return to the old, frequently derided, but socially and economically imperative, virtue of thrift Taxes and Savings

“I can see the newspaper editors reaching for their pens. They are going to say, ‘You can’t expect pedple to save while taxes are so high; .Reduce taxes and you’ll find the savings come rolling in.' Unfortunately for this argument, experience in recent

years does not support it,” Mr Nordmeyer said. “Between 1962-53 and 1957-58 the Government of the day was able, because of high export earnings, to reduce direct taxes as a percentage of private income from 21 per cent, to 17 per cent. In the same period private savings fell from 13 per cent, to 10 per cent. The reduced proportion of taxes was taken up in increased consumption, which rose from 66 per cent, to 73 per cent

"I do not claim'that everybody can save. There are no doubt some whose obligations and commitments are such as to make savings difficult if not impossible. But there are many others who would be helping themselves, and helping the community as a whole, if they were to refrain train spending all their income on the satisfaction of current wants and- to put aside even a small portion of their earnings for the future.” President’s Views

New Zealand was almost unique in the curb.which was imposed bn the development of private..'an, opposed? to State savings ’banks, said Mr P; E. Stainton in his presidential address to the conference. ' X

“With the changing conditions in .which we are living, and with the-proposed introduction by the Post Office Savings Bank of a new service for certain classes of its depositors, is it not timely that we make, a sober but realistic survey regarding the future progress of trustee savings banks?” he asked.

“What is the future of savings and savings banks in ibis' Dominion? This depends largely on Government policy. If that policy is sound and safeguards the value of the people’s savings, so will the popularity of savings increase.”

Mr Staintqn said that if experience was any criterion, it could be said with certainty that, providing trustee savings banks were not unfairly handicapped by being denied the right to give to its depositors a service at least equal to that offered by the Post Office Savings Bank, then there should be no reason why trustee savings banks should not continue to make a valuable and increasing contribution in the (encouragement of thrift. “We are most gratified to know that our activities have received the whole-hearted recognition of the successive Royal Commissions, and we still confidently trust that those recommendations will be acted upon by the Government.” Mr Stainton said. There was full recognition of the part played by the trustee savings banks in assistance to Government and local body loans, and to the financing of many hundreds of people into homes and farms. There was a sincere appreciation by the public of the generous allocation of grants to educational, charitable, and social organisations, which amounted to some £30.000 a year. "We therefore cannot understand why the official attitude should so circumscribe our activities,” Mr Stainton added.