Treasury Report Leads To Stormy Scene In House

Press, Volume XCVIII, Issue 28937, 3 July 1959, Page 12

Treasury Report Leads To Stormy Scene In House

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WELLINGTON, July 2. An allegation by Mr W. B. Tennent (Opposition, Manawatu) that the Minister of Agriculture (Mr Skinner) “knew he was not giving the facts to the House” when he quoted overseas exchange figures last night was withdrawn after a stormy scene in the House of Representatives during the Address-in-Reply debate this afternoon.

Mr Tennent said the Minister had told the House that New Zealand's overseas exchange and securities totalled £42m in December, 1957, but the Treasury document from which the Minister quoted, and which he had “reluctantly” laid on the table of the House, showed that overseas exchange amounted to £4sm in December and had fallen to £42m by the end of the following January. "The Minister knew he was not giving the facts to the House,” Mr Tennent said.

Mr Speaker at this point asked Mr Tennent to withdraw that remark.

Mr Tennent: I cannot believe the Minister did not know he was misleading the House. I cannot withdraw, and I am prepared to take the consequences. The Leader of the Opposition (Mr Holyoake): I know exactly how the member feels, and I honour him for it. He has made his point, and I think he will comply with the rules of the House.

“Defiance of Rales” The Prime Minister (Mr Nash) said that Mr Holyoake had said that Mr Tennent had made his point and his honour was satisfied. Mr Holyoake’s statement was in complete defiance of the rules of the House. Mr J. T. Watts (Opposition, Fendalton): Sit down, sit down. Mr Nash: You'll be in trouble some day if you carry on like that. After further discussion, Mr Tennent said he was prepared to withdraw. When Mr Tennent ended his speech, Mr Skinner said he had not misquoted from the Treasury document. “I said last night that overseas exchange at December 31, 1957. was £4sm—not £42m as the member for Manawatu claims,” Mr Skinner said.

The report, made by the Secretary of the Treasury (Mr E. L.

Greensmith), said that New Zealand’s overseas exchange reserve position at December 31, 1957, was “as bad as it was in 1938."

The report, compiled for the Minister of Finance (Mr Nordmeyer) in May last year, was tabled at the request of Mr T. P. Shand (Opposition, Marlborough) after Mr Skinner had quoted from it. Mr Greensmith’s report showed that at December 31, 1938, the overseas exchange and securities held by the banking system was £Bm, gold at market value was worth £ Bm, and overseas securities held by the New Zealand Government were worth £lm, a total of £lsm.

The approximate level of total overseas payments at that time was £6sm, and Mr Gfeensmith calculated that the total reserves, as a proportion of overseas payments, was 23 per cent. Comparable figures at December 31, 1957, were:—Overseas exchange and securities held by the banking system, £4sm; market value of gold, £l2m; overseas securities, £27m; a total of £B4m.

Percentage In 1957 The approximate level of overseas payments was £34om, and the total reserves expressed as a percentage of overseas payments was 25 per cent.

The report* said: “These figures show that the position as far as reserves are concerned is as bad as it was in 1938 in terms of the level of our overseas payments, which is the proper measure of the adequacy of reserves. "Since the end of 1957 the position has been worsened by the fall in prices for butter and wool, and the outlook for export prices is not bright, whereas in the previous crisis export prices improved after 1938. “Another consideration is that the utilisation of such absolute reserves as the gold reserve and the securities held in funds such «« tiie Defence Fund, plus the furtiier running down of our banking reserves, could lead to loss of confidence in New Zealand and consequent difficulty in raising loans.

» . uncert * in how long the fall in export prices will last so we should at this stage shepherd our reserves this year as far as possible rather than try to run them down."

A ship is always referred to a ‘she’ because it costa so much to keep her in paint.”— Admiral Chester W. Nlmitz.