Finance Board’s Role

Press, Volume CIV, Issue 30768, 4 June 1965, Page 1

Finance Board’s Role

(N.Z. Press Association) WELLINGTON, June 3. New Zealand’s development would be greater and the standard of living would be raised, as a result of establishing the corporation, said the Minister of Industries and Commerce (Mr Marshall) when he opened the first meeting of the board of the Development Finance Corporation today.

No-one could see precisely what the corporation would achieve, said Mr Marshall. But its role would be to assess proposals for industrial development and expansion for which finance was not

available on reasonable terms and conditions from other sources and to assist those having worth-while potential. The establishment of the corporation had taken a long time and had been carefully considered. Its purpose was not to be just another source of finance. Mr Marshall said the corporation’s act directed it specifically to finance new industry and industrial expansion where, for reasons such as insufficient security or too great a risk, finance was not available from other sources. He expressed his confidence in the future of the corporation and hoped it would gain the confidence of the public. On this would depend much of the corporation’s success. At today’s meeting, Mr K. C. Campbell, chairman of Cable Price Downer, Ltd., was elected chairman and Mr S. J. R. Chatten, manager for

New Zealand of the A.M.P. Society, was elected deputy chairman. The board is taking steps to appoint the necessary executive officers and to arrange the subscription of the first £1 million of capital which has been allocated to the trading banks, the life insurance companies, the fire and accident assurance companies and the Reserve Bank. Mr Campbell said he hoped an announcement could be made soon as to when the corporation would be in a position to receive applications from borrowers. In reply to a question by Mr N. V. Douglas (Opp., Auckland Central) in the House later, Mr Marshall said negotiations for the provision of capital were complete, according to the Parliamentary reporter of “The Press.” It had already been announced the capital would be £2 million in 10s shares, and the Reserve Bank and the trading banks would each take 600,000 shares and the insurance companies 800,000. The majority of members of the board were associated with major financial institutions. This was one of the qualifications. The Bank of New Zealand would provide 213,000 of the trading banks’ shares but he did not think Government insurance offices were associated with the others in providing capital. Three of the directors were Government directors and the balance represented those who were providing the capital.

The Labour Party, when the Government, had the opportunity of setting up such a corporation but did nothing about it.

Dr. A. M. Finlay (Opp., Waitakere) asked if it were compatible with the independence many people felt was required by members of such a board that some should be representatives of financial institutions. Mr Marshall: Yes, most of the capital, at this stage, is to be contributed by them.