HARBOUR BOARDS LOAN

Press, Volume CII, Issue 30192, 25 July 1963, Page 14

HARBOUR BOARDS LOAN

World Bank Negotiators Here In September [From Our Parliamentary Reporter} WELLINGTON, July 24. To settle terms and conditions of a loan to harbour boards, negotiators from the World Bank will visit New Zealand in September.

The Associate Minister of Finance (Mr Seath) announced the visit in Parliament today when he replied to a motion by Mr S. A. Whitehead (Opposition, Nelson). The Government hoped to raise a loan direct from the World Bank as an intermediary for the local bodies concerned, said Mr Seath when he outlined progress so far in supplying information to the bank about New Zealand’s loan requirements.

Reports by officials who had visited New Zealand had not been made to the Government, he said.

Mr Whitehead introduced a debate on the World Bank and International Monetary Fund by moving that all reports to the Government from these organisations be tabled in the House and reports affecting local bodies investigated by officials of the fund be available to the bodies concerned.

The Opposition, said Mr Whitehead, questioned whether the Government was entitled to enter the fund and the bank without the endorsement of the people of New Zealand, At the Government's invitation, officials had investigated the creditworthiness of many local bodies and the Government would enter into binding agreements for these bodies. They were entitled to know what was happening. Mr Whitehead said that if an agreement were entered into, the bank ha J the right to look at harbour boards’ plans which were not expected to be met out of loan money. It could tell boards to change their accountants if necessary, and the Government. because it accepted responsibility for the loans, would have to rearrange its fiscal policies if the bank decided this was necessary.

* The Harbour Boards' Association was by no means unanimous about loan money from the bank, said Mr Whitehead. No Reports Yet Mr Seath said no officials of either organisation who had visited New Zealand had yet made a report to the Government and both the Prime Minister (Mr Holyoake) and the Minister of

Finance 'Mr Lake) had given assurances that loans from the bank would not inhibit the Government from deciding its own fiscal policies.

There had been no negotiations for drawing on the International Monetary Fund, said Mr Seath. There could be no objection to the publication of project appraisal reports which were the basis on which the bank granted loans. “There is no compulsion on harbour boards should they want to stand out,” said Mr Seath. A mission from the bank last year investigated the possibility of lending for harbour development and it had reported to the bank's management, but this report had not yet been made available to the Government, he said. Nor did the Government yet know what amounts were being considered for any port. New Zealand’s application for a railway development loan had been investigated and though the Government had been advised that the bank was prepared to consider a loan, the bank wanted further information, said Mr Seath. Power Development No mission had visited New Zealand regarding the application for a power development loan, but the assistant chief of the public utilities section of the bank had examined the construction programme last year. Mr Seath said. The decision by the Government to develop Manapouri power had altered the concept of power development and additional infor-

mation had now to be supplied to the bank. Mr Whitehead’s motion appeared inappropriate, said Mr Seath. He moved an amendment that the House endorse the Government’s action in joining the fund and the World Bank and the procedure being followed in dealing with loan applications.

Mr M. A. Connelly (Opposition, Riccarton) said the country’s stability could have been maintained without joining. New Zealand did not lack supplementary exchange. Now it was unable to obtain loans on the world market. It has lost its economic freedom. Mr R. D. Muldoon (Government. Tamaki) said the I.M.F. was the international financial forum. It was the same as G.A.T.T. and the United Nations. Mr W. Nash (Opposition. Hutt) had been an architect in establishing the World Bank. Yet in the hope of capturing political feelings the Opposition had opposed New Zealand’s joining, said Mr Muldoon.

Mr W. A. Fox (Opposition) Miramar) said Mr Holyoake had opposed joining the I.M.F. in 1954. But the only way to institute the “steady does it” policy was through excessive borrowing. Mr Fox asked Mr Lake: Will the agreement be submitted to this House. Mr Lake: It may be. Labour Policy Mr N. E. Kirk (Opposition, Lyttelton) said that if Labour was elected, it would honour all the present Government’s commitments and sever connexions with the bank and the fund. More than 70,000 people, many of them National supporters, had signed a petition opposing membership of the fund and bank.

Mr Lake said the Opposition comments did New Zealand no service, or make his task in seeking loans overseas any easier. Their suggestions were in line with Communist countries which opposed the fund. The only cost to New Zealand of joining the organisations was the gold lying to the country’s credit—gold the Labour Government had pledged to a New York lending house The reports made on the railways and harbours were not available to the Government. If they could properly be made available to the public, they would be. “At this stage they are confidential to the bank’s board. I have no information on what is in them,” he said.

The debate was interrupted by the dinner adjournment.”