BONUS PLAN

Evening Post, Volume CXIII, Issue 142, 17 June 1932, Page 8

BONUS PLAN

IS IT CONJECTURE?

_ Though the London Press comments indicate that a subsidy is at least' a possibility, the provision of assistance to primary producers in New Zealand by that means seems at present to be purely a matter of'conjecture. Nevertheless it is not unreasonable to suppose that there may be some foundation ,for the report in the "Financial Times."

A subsidy of, say, 10 or 15 per cent, or more would be equivalent to raising the exchange rate to £120 or £125 as tar as primary producers are concerned, and would at the- same time have the advantage of avoiding artificial distnrbance of our import trade. , The primary producers would be receiving assistance, and vet the exchange ratel! whatever their eventual level, would continue to be determined by "the balance of trade. In this way our overseas credit would "be. preserved' and our prospects of making satisfactory arrangements at Ottawa would not be prejudiced. It has previously' been pointed out that an increase "of, say 20 per cent, in the rate of exchange would increase the burden of the overseas debt by a further £30,000,000., besides also increasing thp_ cost of our overseas interest bill/ "' "'-""< - - A. few millions expended by way of subsidy might obviate this. _Hbw a subsidy could, be'introduced is, of course, a matter for the Government and probably the banks. -, '