Views Differ On Overseas Balance

Press, Volume CVIII, Issue 31680, 16 May 1968, Page 1

Views Differ On Overseas Balance

The Minister of Finance (Mr Muldoon) and the chairman of the Monetary and Economic Council (Dr G. B, Battersby) were not in full agreement about New Zealand’s balance-of-pay-ments position when they spoke to the Lincoln College farmers’ conference yesterday.

Mr Muldoon said that provisional figures he had received for the year ended April 30 showed a surplus of $l7 million, which indicated that for the first time for years New Zealand had lived within its income. In a statement later in the day he amended this to slm.

“It is clear that internal economic activity should be encouraged to move at a rather more rapid pace now

and this will mean that the improvement in our balance-of-payments position will be much less rapid and will tend to level off,” he said. “While I do not accept that the position is really as good as this,” said Dr Battersby, referring to the figure of a sl7m surplus, “there has been a dramatic improvement.” Dr Battersby said that the Monetary and Economic Council, which had earlier forecast a s6sm deficit in the year ended in June, was now predicting a 810 m deficit for the same period. Devaluation was thought to

have been the major explanation for the dramatic change. There had been a rise in returns from meat exports of s23m, a slom improvement in receipts from wool, a fall in the cost of imports of sl9m, and an improvement in invisibles of about sBm. For the year ending June next year, the council predicted a deficit of s2sm, Dr Battersby said, and it was thought that the Government’s plan to have achieved a state of equilibrium by December next year could be attained without more restraints. However, it would not permit much relaxation this year or next year, although it would be election year. Dr Battersby said that there was certain to be a rise in imports in July-August this year and for this reason the present situation was not as good as it might seem at first sight.