Imports Brought Under Control

Press, Volume CI, Issue 29894, 7 August 1962, Page 14

Imports Brought Under Control

New Zealand's balance of payments is still far from good; but tangible success in the Government's campaign to curtail imports is shown tn the Reserve Bank's survey of New Zealand overseas exchange transactions for the trading year ended June 30 Comparison of the Reserve Bank's survey with the Economic Survey (for the year ended March 31) shows a sharp * drop in imports tn the last three months, due of course to the Government’s extension of iast year's licences for an additional six months Partly because of this, overseas transactions for the year ended June 30 resulted in a surplus of £6 9 million. compared with a deficit of £57 6 million the year before. A reduction of £54 7 million

tn payments for imports is chiefly responsible Government imports bear £l.l million of the reduc tion; private imports the remainder. Export income was down by £300.000 compared with the previous year, this comparatively small reduction being due chiefly to a fall of £3 8 million in returns from meat. Butter and cheese returns were not sufficiently greater to offset reductions in income from meat and other exports.

In spite of the reduction in payments for imports, the surplus would not have been achieved without substantial borrowing and realisation of securities and gold. A fair amount of put and take among several accounts and transactions rather confuses the view of the make-up of such items as the £90.2 million of “ other receipts ” and the £41.1 million of “other” Government payments Included among the receipts are capital receipts of £48.3 million, made up of £21.6 million from the realisation of Government securities and £26 6 million from overseas borrowing and Government payments included £ll5 million for repayment of overseas bor rowing, and £ 17 4 million for Government investment in overseas securities, including subscriptions neces sarv for entry to the International Monetary Fund.

Both the Economic Survey and the Budget stressed that overall the country was spending more overseas than it was earning, and that overseas exchange reserves would have to be supported by more borrowing No-one can be happy about this; but there are good reasons for satisfaction in the evidence of the Reserve Bank’s survey that the excessive importing of 1961 has been brought undei control. There is evidence also that stocks (which accumulated because 1961 imports were well in excess of current requirements) are generally at a satisfactory level. There are reasons for hoping that the prospects of a favourable balance of payments are becoming firmer.