FINANCES SOUND

Dominion, Volume 28, Issue 285, 29 August 1935, Page 10

FINANCES SOUND

New Zealand’s Credit Stands High To-day

CONVERSION LOAN

TEST

Mr. Coates Reviews Budget Problems . tt.v Telegraph.—Press Association Auckland, August 28. The Minister of Finance, the Rt. Hon. .1. G. Coates, returned to Auckland after delivering an address tit Helens ville on tiie lines of that given al Dargti ville on Monday. The Ministerhad only one public engagement to-day before leaving for Wellington to attend Hie opening of Parliament. This was at a luncheon of the Auckland Creditmen's Club, the Minister speaking principally on the subject of balancing tiie Budget. The orthodox system, .said the Minister. was to balance the Budget at the cud of the year, but a.question always to be faced was whether it was really wise always strictly to adhere to that principle. Mr. Coates referred to the important part credit had played during the years of depression. Creditmen had found it necessary to get behind and assist, he said, and what they had done had been of great help to the country. It had been said that, bad it not been for the banks where would the country have been? The answer was best put in the form of the question : Was it the banks who had pulled the country through the difficult times, or was it the country that had pulled the banks through? The fact of the matter was that everyone had assisted. It was essential that there should l>e a point at which we should balance our accounts, but the question was when. There had been much criticism of the extension of the life of Parliament. It was clear in 1931 that it would take New Zealand four years at least to emerge from the depression. Whether the Government was wise or not in extending its life was a mutter for public opinion. He maintained Unit as a result of this action, through the determination of citizens of tins country, and creditmeu in particular, the country must emerge triumphant if everyone stuck to his job and looked ahead.

Dealing witli the meeting of Budget deficiencies, Mr. Coates said it had been possible to bring costs down 10 per cent, to balance the- Budget. It was necessary to make for a point where a balance could best be reached. To endeavour to bring casts down to a point where tiie Budget could lie balanced at the end of a year would bring about more distress than could possibly be imagined. It was essential that tiie balancing of the Budget should be spread over a period. The main precautions that had been taken were in an endeavour to reduce overhead costs by reducing salaries, rents, etc. Some of this was very unpleasant, but if this had not been done where would we have been to-day?

Some of the increases in revenue might be termed windfalls, but he would say that the public finances and credit to-day had reached the stage when the picture was entirely changed compared with a few years ago. The endeavour to bridge the gap had shown that the country’s credit was very sound. As a test of the country’s credit there was the recent New Zealand conversion loan of approximately £10,000,000, The public response and Press comments had indicated that Nbw Zealand stocks to-day reached as high a level as any other on the British market.