Mr Kirk Says Deficit £92.5m

Press, Volume CVI, Issue 31188, 12 October 1966, Page 3

Mr Kirk Says Deficit £92.5m

10 Zealand Press Association

AUCKLAND, October 11. The Leader of the Opposition (Mr Kirk) today described the Minister of Finance (Mr Lake) and the Government as being “quite unrepentant” about their financial recklessness. I here could be no other explanation of Mr I .ake’s attempt to gloss over a staggering £92.5 million deficit in the country’s overseas borrowing transactions.

Mr Lake had given a wrong impression when he said: “While the current rate of interest on new borrowings is undoubtedly high, such borrowing is fully justified, providing the return from the investment in works of national importance exceeds the rate of interest payable.” Mr Kirk said this piece of double-talk was, no doubt, designed to convey the impression that all the £l2 million borrowed recently at 7 J per cent was for new capital works in New Zealand. That was not the position. The sum of £7 million was to pay a London loan due in December. On that £7 million, New Zealanders would pay £525.000 a year interest. “Thus, over the next 17 years New Zealanders will pay £8,925,000 in interest on a loan to pay off a loan and will end up still owing the £7 million.”

| This appeared to be viewed by the Government as an I “Alice in Wonderland” situation which it regarded as ideal.

Mr Kirk said the £92.5 million deficit was not only significant for its size, but for the accelerating period of deterioration it disclosed in the country's balance-of-payments situation. The comparable deficit in 1963-64 was £16.9 million and in 1964-65 it was £25.1 million.