Labour promises resources bank

Press, 5 August 1981, Page 2

Labour promises resources bank

PA Wellington A new Labour government would establish a resources development bank to help boost investment within New Zealand, the leader of the Opposition (Mr Rowling) announced yesterday. ;■ Re told the Wellington Chamber of Commerce that the new bank would be established in association with the Development Finance Corporation. Its main aims would be todirect finance to important industrial projects and to help in industrial development and rationalisation programmes. The majority shareholding in the new bank would be held by the D.F.C. and the remaining 49 per cent would go bn offer to the public. The bank would also seek a stock exchange listing and be granted a limintd banking licence to allow it to work with existing banks and finance houses.

“Let me make it quite

clear that this bank will work alongside existing organisations," said Mr Rowling. "It will be carrying out some functions that they cannot, but in other areas we are looking for partnership, not government domination." Mr Rowling said the new bank would be in the “front line" of the regeneration of local industry and of financing the "think-balanced" programme — Labour's alternative to the Government's “think big" stategy.

The. bank would have a staff of up to 30 and although some of its financing would come from the Government to allow money to be loaned in priority areas at low interest rates, “a good deal of it will have to come from the New Zealand community and there will be new and innovative ways of encouraging savings." Overseas borrowing would -continue under a Labour government, said Mr Rowling, but Labour's borrowings would be used “to promote

investment in the private sector throughout the economy."

He attacked the Budget for giving little sign of "a coherent strategy that would attack the real problems facing this country" or any explanation of the Government's policies.

He also criticised the "think big" strategy for costing $1.5 billion in the next five years, loss which would have to be met by borrowing.

The projects being funded by such loans would start saving overseas funds only at. the end of the decade, said Mr Rowling. “That is seven, eight, or nine years of continuing bal-ance-of-payments problems and seven, eight, or nine years of high unemployment.

"The events of the last weeks show how close to the surface violence — a byproduct of unemployment — in New Zealand really is.” he said. "Another seven years or more of unemployment would be disastrous."