INCREASED SPENDING’

Press, Volume CIV, Issue 30845, 2 September 1965, Page 3

INCREASED SPENDING’

(N.Z. Press Association) WELLINGTON, Sept. 1. The main effect of the Government’s new financial measures would be to increase Government spending in the form of interest payments, said the president of the Federation of Labour (Mr T. E. Skinner) tonight. Increased interest charges would mean higher prices to the consumer, said Mr Skinner.

He would find it harder to spread his spending over a period as he had previously done with hire purchase. The small man and the least wealthy concerns would be hit. Big businesses would profit by higher charges. Private citizens, local bodies and others who were not able to compete in meeting interest costs would be denied finance and the cost of living would rise again. “The Federation of Labour

has consistently warned the Government of its disastrous policy of borrowing without provision for repayment,” said Mr Skinner.

BANKS APPROVE The financial restraints announced by the Minister of Finance (Mr Lake) have been approved by the New Zealand Bankers’ Association. Its research director, Mr J. W. Rowe, said that the private savings banks had agreed to increase their investments in Government stock because they appreciated that such measures were necessary to maintain economic stability in the present circumstances. He said the ability to charge higher interest rates on accounts that were not adhering to the agreed reduction arrangements would make this policy of restraint more effective. DEALERS’ HOPES The New Zealand Licensed Motor Vehicle Dealers’ Association hoped the Minister of Finance (Mr Lake) would see fit to relax the “very restrictive measures” taken in re-

spect of hire purchase sales at an early date, said Mr D. A. Nichols, president of the Canterbury branch. “Once again the average motorist and the motor trader has been burdened and forced to bear the inconvenience considered necessary by the Government to implement an immediate credit squeeze,” said Mr Nichols. “This association regrets the Government’s course of action because it had been pressing for a longer term of repayment on hire purchase agreements. “Hence, it seems that our chances of ridding our roads of the older cars and progressively reducing the prices of newer models are not good at present. “Nevertheless we do not anticipate any marked decline in the values of used cars as a result of the new regulations. Experience has shown that the supply of good vehicles does not meet demand, especially during the spring and summer months, which is a buoyant sales period,” he said.