Hire-Purchase Held Beneficial

Press, Volume CIII, Issue 30480, 30 June 1964, Page 3

Hire-Purchase Held Beneficial

(Neto Zealand Press Association)

WELLINGTON, June 29.

The effects of hire-purchase and credit trading have in general been beneficial both to the individual and to the economy, says the Department of Industries and Commerce, in a submission to the Tariff and Development Board inquiry which entered its second week in Wellington today.

The board is inquiring into the commercial, social and economic implications of hire-purchase and credit trading. The department said the direct effect of hire-purchase on consumer demand and the consequent effect upon business and Government investment had been “stimulating.” The objectives of industrial policy, especially the establishment and expansion of

manufacturing industries, had in part resulted from the expanding effect credit trading had exerted on the economy. But the department warned that, hire-purchase control was desirable. Although an increase in hire-purchase trading would result in the expansion of industries producing the goods, the investments used in financing hire-purchase transactions, particularly in a period of credit restrictions, might be deflected from more urgent production enterprises.

“For New Zealand, which has an acute shortage of industrial and development capital, this is a serious problem,” said the department. “It could be met by placing restraints on borrowing by finance companies and by regulations which reduce the demand for hire-purchase accommodation,” the department said.