Savings Week

Press, Volume CIX, Issue 32119, 15 October 1969, Page 14

Savings Week

Sir, —A few weeks ago the Minister of Finance stated that the average rate of inflation over the last few years was over 3 per cent This week we are suffering the propagation of “National Savings Week” by such disinterested parties as the Minister of Finance, various bank presidents, etc. Nowhere will we hear that the vast majority of people who Invest at 3 per cent interest or less are actually losing buying power, i.e., money. It is clear that our financial institutions have a vested interest in maintaining a controlled rate of Inflation and your readers deserve a more critical review of the relative merits of various forms of saving.—Yours, etc., A. L. WILKINSON. October 6, 1969.

[Mr C. A. McFarlane, chairman of the New Zealand Savings Committee, replies: “Discouragement of saving is acknowledged to be one of the worst of the undesirable effects of inflation, but it can equally be claimed that saving is a most potent weapon against inflation. In fact, the New Zealand Savings Committee was established in 1961 to encourage all forms of saving (not only national savings) to provide the investment capital necessary for economic growth and to act as a curb against inflation. The report of the Royal Commission on Monetary, Banking, and Credit Systems (1956) pointed out that 'failure to achieve this balance between private and public savings on the one hand and capital Investment on the other lies at the root of our inflationary problem.’ Over recent years there has been an increase in personal savings and a decided swing towards the contractual and longer-term types of invest- ; ment. This trend, if continued, will help materially in meeting the savings targets set by the National Development Conference.’’]