Change In Terms Could Start Boom

Press, Volume CII, Issue 30157, 14 June 1963, Page 12

Change In Terms Could Start Boom

(New Zealand Press Association)

WELLINGTON, June 13

No alteration would be made to hirepurchase terms for the present, the Minister of Finance (Mr Lake) told the Hire Purchase Association of New Zealand in Wellington today.

“The proposals put forward by your association were very carefully considered by the Cabinet committee on economic and financial qpestions and later by Cabinet,” said Mr Lake. The decision was associated with the Government's desire to keep internal spending to a level which the country could afford. He added that the Monetary and Economic Council's latest report advocated firm control over bank credit “Naturally, this monetary control must also extend to hire-purchase lending,” he said. “The volume of hirepurchase transactions is now considered an important indicator of economic activity generally, and terms control has become a vital part of monetary policy. “What we have to guard against in existing circumstances is the possibility that major changes in the volume of hire-purchase business may greatly increase internal demand.” If there was inflationary pressure in the economy, undue increase in hire-purchase sales tended to add to the pressure on scarce resources. “If we allowed boom con-

ditions to develop we would undo all the hard work of the last two and a half years and put back indefinitely the prospect of higher living standards,” he said Mr Lake said the hirepurchase industry could play a most important role in New Zealand’s drive for a greater rate of economic growth. Together with other financial institutions, hire - purchase concerns were today investing more and more in productive enterprises often where there was a certain amount of risk.