Saving Not Negative But “Essential”

Press, Volume CI, Issue 29818, 10 May 1962, Page 8

Saving Not Negative But “Essential”

Saving was not a negative process, it was not hoarding, said the Minister of Finance (Mr Lake) when he arrived in Christchurch yesterday to attend a meeting of the New Zealand Savings Committee.

New Zealand’s savings campaign was not just to build up savings which went to Government, he said, and by far the greatest part of any increase in savings would be used to finance investment in the private sector.

Later, Mr Lake lunched with the committee and Christchurch businessmen.

“The committee is doing a good job in investigating ways and means of encouraging savings and making recommendations to the Government,” he said. “It is not an easy job and quick spectacular results cannot be expected” Since 1955, the proportion of the gross national product invested in New Zealand had fallen from 26 per.eent. to about 20 per cent., said the chairman of the committee, Mr C. A. McFarlane, at a press interview with the Minister.

“In fact, the rate of saving last year was quite shocking,” added Mr Lake. Although it was often said that young people did not save money, Mr McFarlane said that some teen-agers saved extremely well. To establish just how well, and to get other information on who saved money, and how, the committee was sponsoring a pilot survey of saving in the Hutt Valley. If this revealed useful information a more extensive survey would be made. Pilot Survey Mr McFarlane said yesterday that a commercial consumer research organisation had been engaged to make the pilot survey. "We want to try to find out who is doing the saving, how much they save, what the age groups are and their objectives. Then we will know to which people we should apply our efforts.” This small survey will cost about £3OO, but only if it produces useful information will a larger inquiry be made. "Some of the committee’s recommendations have already been adopted—the development bonds scheme is one of them—and others are being considered,” said Mr Lake.

The committee is also looking into some research proposals to build up basic economic information about savings.

Object Of Campaign The object of the savings campaign Was to build up savings in all sections of the community, not merely those which came to Government. Mr Lake said. Although the Government had to provide essential basic services for the economy, the task of establishing new industries and expanding productive resources was primarily one for private enterprise. By far

the greatest part of any increase in savings would be used to finance investment in the private sector.

“Saving is not a negative process—it is not hoarding." said Mr Lake. “Personal savings are put to work through the various savings inrtitutions to increase production. If the country as a whole spends a little less on satisfying current wants, it is able to spend more on productive equipment.” The rate of saving and investment in New Zealand was lower than desirable and had been tending to fall foe some years, said the Minister. Th is was a long-term trend which presented a very real threat to living standards and economic progress in future. If it continued, everyone would be worse off—farmers, businessmen and wage earners. Everyone stood to gain by building up savings and investment.

A higher rate of savings and investment was essential if the Dominion's long-term economic problems were to be dealt with successfully, he said. Yesterday's meeting of the committee was the first held in Christchurch.