Indebtedness Figure Denied By Mr Lake

Press, Volume CIV, Issue 30938, 20 December 1965, Page 13

Indebtedness Figure Denied By Mr Lake

<New Zealand Preu A«iociatton> WELLINGTON, Dec. 19. The Minister of Finance (Mr Lake) denied yesterday that New Zealand’s overseas indebtedness this year had risen by £61300,000. He said this had been suggested by the new leader of the Labour Party (Mr N. E. Kirk) in Auckland.

Mr Lake oaM the jmhlle Sebt MaidleS uveraeaa ha 4 risen by in the IMS calendar year. In a atatement, Mr Lake oaM Mr Kirk** reaarki about the Government borrowinc were finite “mirieading.” “The new Labour spokesman apparently fails to understand that New Zealand's total external debt has not passed the total amount borrowed,” said Mr Lake. “This is because some of the borrowed money has been issued to repay maturing debt”

The Minister said that as a result of all capital borrowing and debt repayment operations during the 1965 calendar year, the Public Debt domiciled had risen by approximately £B,soo,ooo—not £61.800,000 as suggested by Mr Kirk. “Even if the short term drawing from the International Monetary Fund of £22,300,000 is regarded as overseas public debt-—which strictly it is not—the rise in external indebtedness would be £30,000,000.” The Minister said it seemed that Mr Kirk had taken a number and doubled it. “This may be regarded as smart politics in some quarters but it does nothing to develop the informed public opinion which is essential for the proper functioning of the democratic system of Government”

Mr Lake said that to assist the Opposition, and to inform the public, he would soon make a full statement about the value of borrowing to speed sound economic development. “Mr Kirk's statement that a substantial amount of the money borrowed this year has been used to finance consumption is obscure and misleading. “If it refers to imports of consumer goods, which is the only interpretation that makes sense in the statement, it also is inaccurate. I suggest that its author study the official import statistics. No doubt he will be surprised to discover that consumer goods are a very small part of New Zealand's imports. “If after discovering this, he then takes into consideration that all of New Zealand’s external borrowing, except the LM.F. drawing, is specifically for capital purposes, he perhaps will see the pitfalls of noisy generalities.”

Mr Lake said that where it was merely descriptive of Labour policy, Mr Kirk’s statement contained much of interest. “I’m gratified," said Mr Lake, “to read that Labour now supports the Government’s policy of channelling investment into increased production for export” He said he was also happy to note the comment which seemed to herald an impending change in Labour policy

on Vietnam. “I predicted such a change in a public speech in Christchurch shortly after the end of the last Parliamentary session,” said Mr Lake. “I again urge all responsible Labour Members of Parliament to work for the reversal or the substantial modification of the decision of the Labour Party conference to appease the Communist aggressors in Vietnam,” Mr Lake said.