Export prices key to Govt borrowing

Press, Volume CXV, Issue 33815, 11 April 1975, Page 3

Export prices key to Govt borrowing

\\ El i i\< ; rox. \prii in. Ihe Minister of l-inance Mr lizard would not today how lonj; New Zealand could continue its present rau <»i borrowin'- if export returns did not increase.

Questioned in Parliament about the Government’s statement in the Speech from the Throne that the present level of borrowing could not be sustained. Mi lizard said again that high borrowing could not he continued lor any great length of time. Bui he told Mr .1. K Harrison (Nat.. Hawke’s Bay) that in the light of New Zealand’s history of fluctuating balance of payments the Government had based its borrowing 'Strategy on two main considerations, supported by the country's good overseas credit standing. Borrowing had allowed the economy to adjust to the sharp change in the balance of payments position, and borrowing had also allowed New Zealand to protect its capacity to respond strongly.

to the expe<ted improvement in world trade "If this improvement is long delayed, however, further measures may be required to ensure that the economy does- not <ont inue to live beyond it' means n the longer term." he said Mr li/atd told the l eader of the Opposition (Mr Muldoon) that New Zealand had raised no loans at an effective interest rate of 10 p-r cent. To a further question from Mr Hanison. the Minister said negotiations on a number of loan proposals were continuing with several Middle l ast nationThe details would be announced when rhe negotiations were completed. He told Mr Muldoon that it was not true that Iran had stopped its lending programme in the meantime There had been a delaj at one stage in the negotiations

if New Zealand’ case ipinion" over interest ra’es.