EXPORT CREDITS

Evening Post, Volume CXXVIII, Issue 64, 13 September 1939, Page 16

EXPORT CREDITS

MR. NASH EXPLAINS

N.Z. INDUSTRIES

"FULLY PROTECTED"

The. arrangements made with the Export Credits Guarantee Department of Great Britain were designed to facilitate the export of goods from the United Kingdom to New Zealand, stated the Minister of Finance (the Hon. W. Nash) in the House of Representatives yesterday afternoon in reply to an urgent question asked by Mr.. C. A, Wilkinson (Independent, Egmont). He emphasised that the New Zealand Government's obligations to existing industries in the Dominion had been fully protected.

Mr. Wilkinson asked if Mr. Nash j would give the House and the country information regarding the recent loan arranged by him in London amounting to £4,000,000 for commercial purposes, and its relationship to the export of goods from the Unitec Kingdom to New Zealand. He also asked if the j ; Minister was aware "that at the pre- j 'sent moment, English shippers are de-| i manding sterling payment in London | ! before executing orders for essential ! goods that are required in this country | to maintain production. Further, will i the Minister advise if there were any stipulations made by the lenders re- ! garding the establishment in New Zea-1 land of uneconomic industries, and especially a large undertaking to which the Government had apparently committed itself?" DEFERRED PAYMENT BASIS. "In cases where it is necessary, owing to the recent shortage of sterling funds, to import goods from the United Kingdom on a basis of payment being partly deferred for several months, the arrangements made will enable the United Kingdom exporter to go to the Export Credits Guarantee Department and obtain a guarantee of payment in sterling of 75 per cent, of the postponed remittance," said Mr. Nash. "At this end, in order to obviate business being hampered by doubt and uncertainty, arrangements have been made for the Reserve Bank to issue remittance authorities fixing definitely the particular months, when sterling can be made available for individual holders 'of import licences.

"Furthermore, any risk of loss from possible changes in the rate of exchange in the interim has been avoided by the trading banks being authorised to sell immediately sterling for delivery at times fixed in the remittance authorities. These arrangements, reinforced if so desired by the United Kingdom exporter, with the guarantee of the British Government, should enable any United Kingdom- exporter to obtain readily immediate finance from his bankers against shipments to New Zealand.

"Some cases have been brought to notice where difficulty is being exjperienced in arranging for imports on i the deferred payment basis and these I difficulties have naturally been accentuated by the outbreak of war," Mr. Nash continued. "Every endeavour is being made to find a way out of such difficulties as they arise and so far as imports from the United Kingdom are concerned the credit procedure set out above should overcome them." GOVERNMENT'S UNDERTAKING. Mr. Nash reminded Mr. Wilkinson of the memorandum on New Zealand's policy of regulating imports and its application to imports from the United Kingdom, issued in London in July on behalf of the United Kingdom and New N Zealand Governments, in which New Zealand agreed not to use that policy to foster uneconomic industries but to invite the views of the United Kingdom industries concerned to assist in determining what goods could be economically produced in the Dominion. In cases where it was proposed to grant a limited number of licences to manufacture particular kinds of goods, the New Zealand Government would give United Kingdom interests the opportunity, should they so desire, to put forward proposals for undertaking such manufacture.

"No reference was made to any particular industry, and the Government's obligations to existing industries in New Zealand were fully protected," Mr. Nash added.