WORK FOR GOVT Late payment alleged

Press, Volume CXI, Issue 32566, 27 March 1971, Page 3

WORK FOR GOVT Late payment alleged

(From Our Own Reporter) WELLINGTON, March 26. Increasing evidence showed that the Government was deliberately reducing the liquidity of New Zealand firms and businesses by methods that, to say the least, were highly questionable, said the president of the Labour Party (Mr W. E. Rowling, M.P.) in Palmerston North this evening.

Mr Rowling said that to try to overcome the economic mess it had created, the Government had required trading banks to severely restrict financial accommodation which might enable companies to meet their annual tax payments.

“This is a legitimate financial device, although many businesses must be concerned at the added financial strain it imposes at a time of downturn in the economy. Now, however, there is every indication that the Government has instructed Government departments to delay payment to private firms for work completed under Government contract,” Mr Rowling said. These delays had in some cases been considerable, and had seriously embarrassed firms already struggling to maintain liquidity. Only gross inefficiency or a Government directive could explain the delays, a directive seemed more likely he said. “If so, it is not untypical of the Muldoonery that has characterised the Government’s handling of the economy for a considerable period. “If a private firm has completed work for the Government it has a right to be paid, and paid on time. Delay in payments can serve no useful purpose except to reduce the liquidity of firms so

affected, and in some cases maybe even force them into bankruptcy. "It is ironical that such action should be taken under a supposedly business-orien-tated Government,” said Mr Rowling.