P.M. has reserve punch in war on interest rates

Press, 4 May 1984, Page 10

P.M. has reserve punch in war on interest rates

Parliamentary reporter

Regulations limiting finance-house interest rates will be imposed next week, while another set of more stringent regulations covering the whole financial sector will be held in reserve for use if needed.

The Prime Minister, Sir Robert Muldoon, announced this yesterday after discussing electorate reactions to interest rates with his caucus.

Sir Robert said the Government could now see interest rates coming down. “I’ve got two sets of regulations almost ready. One will come in next week, the other one will be held in reserve for a week or two and we’ll see what happens,” he commented. “It’s the second lot that are tougher and I’m fairly confident that if we have to use the second lot they will be effective.” Sir Robert said he be-

lieved the first lot of regulations, which would be implemented before he goes overseas next Wednesday, would be “effective.”

He was hopeful that by the end of the month, when Parliament will meet again, some results would be seen. “If the financial institutions haven’t got the message by then, then they’ll never get it,” he said. He said caucus generally accepted that regulations were going to happen. The member of Parliament for Rangiora, Mr Quigley, had expressed some ideas, but he had been told they would not work and why they would not work. However, no-one in caucus was prepared to get up and say there should not be regulations. “What is very clear is that caucus realises, it accepts that overwhelmingly public opinion wants in-

terest rates to come down,” Sir Robert said. “Overwhelmingly the message we’re, getting from one end of the country to the other is the public wants interest rates to come down and the method is a secondary consideration.” Sir Robert added that there was no evidence of a withdrawal of money from mortgage financing by lenders. There was a 30 per cent increase in building permits and people who got these permits generally knew where they were getting the money from. “Generally speaking, you can document individual cases of people who can’t get funds. But you can’t document a significant switch out of property,” he said. Sir Robert declined to give any detail of the regulations which are being prepared.