External borrowing advocated

Press, 14 October 1985, Page 14

External borrowing advocated

PA Wellington A limited amount of Government borrowing overseas instead of within New Zealand could be used to lower interest rates, says the Opposition spokesman on agriculture, Mr lan McLean. Interest rates were now the worst problem facing farmers, he told a fanning seminar at Glen Murray in the Raglan electorate. Interest rates were sky high because of the particularly rigid monetary policy adopted by the Minister of Finance, Mr Douglas. “The more moderate monetary policies of Mrs Thatcher or President Reagan would allow a steady increase in money

supply and lower interest rates. “This policy could involve a limited amount of borrowing by the Government overseas, rather than within New Zealand.” Mr McLean said the high exchange rate which was slashing returns for all exporters was mostly due to unreal interest rates. “The exchange rate would come down as interest rates fall” Greater control of Government spending and lower deficits on that spending were needed, otherwise Government borrowing and hence interest rates would still be too high, Mr McLean