Mr Holyoake Appeals For Savings

Press, Volume C, Issue 29651, 23 October 1961, Page 10

Mr Holyoake Appeals For Savings

(N.Z. Press Association) WELLINGTON, October 22. “Taxation or any compulsory savings measures will become necessary only if voluntary restraints prove ineffective,” said the Prime Minister (Mr Holyoake) in an appeal on Saturday for support for the Government’s development bonds scheme. “It has been suggested that the Government should increase taxation or introduce a compulsory savings levy. If we can reduce spending and increase savings by voluntary means, then the need for other measures will be so much less,” said Mr Holyoake.

The bonds will cost £lO each and carry a tax free bonus of 6 per cent, if they are held for the full term of nine years. They can be cashed at three months’ notice. "It is a time of national need and a time for good housekeeping, good housekeeping by the Government and the people,” said the Prime Minister. “With less money coming into the nation’s purse, we must save more and spend less,” said Mr Holyoake. “I have complete confidence in our ability to get on top of our present difficulties. What we are facing is a challenge, not a catastrophe What is required more than anything is unity of purpose and effort and commonsense prudence,” said the Prime Minister. "Our overseas earnings are' down many millions ’of pounds and on top of that as a nation we are spending much more than we can afford both overseas and at home. During the year ended March, 1961, total spending in New Zealand was £169 millions higher than in the previous year. We just can't afford that kind of expenditure,” he said. Personal Spending “Most of this huge increase has been personal spending on consumer goods and services. It is this spending that has caused serious

balance of payments difficulties. Last year we spent about £6O million more on imports than our exports earned for us. There will be another big deficit this year,” said Mr Holyoake. The Prime Minister said, that the Government had taken action to bring overseas spending back to a more realistic level and these measures were, now taking effect “The volume of imports coming into New Zealand is falling off considerably and the Immediate object is being achieved,” said Mr Holyoake. “But there still remains the basic problem of excessive spending and excessive purchasing power within New Zealand. This is a difficulty which will be accentuated with less imported goods coming into the country. The inflationary effect of more money chasing fewer goods is well known. Costs and prices rise and your money buys less,” said the Prime Minister. The Government had so far tackled, this problem by imposing restraints on bank lending, tightening up hire purchase conditions and curbing its own spending, said Mr Holyoake. Capacity To Save “There is no doubt about our capacity to save a great deal. In the year ended March, 1960, all forms of private savings amounted to

£152 millions. In the next 12 months they dropped to £B4 millions, a drop of nearly £7O millions,” said Mr Holyoake. The Special Savings Committee under the chairmanship at Mr C. A. Macfarlane. former Director-General of the Port Office, was to launch a public savings campaign. “You will be hearing a lot more about savings,” said the Prime Minister. “Oyr yoilng people can make a valuable contribution towards building up savings. Wages and conditions have never been better for young people. They have a wonderful opportunity to save for a sound start in life. “Business people and farmers, indeed everyone, can help the savings drive by slowing down on spending and postponing some expenditure where ever possible, so long of course as it doesn’t affect production,” said Mr Holyoake. “It is the Government’s de. dared intention to follow a long-term policy in dealing with our economic problems and difficulties. It is our aim to bring about a gradual readjustment and to avoid severe emergency measures,” said the Prime Minister.