N.Z. FINANCES

Evening Post, Volume CXXXVI, Issue 72, 22 September 1943, Page 7

N.Z. FINANCES

"SOUND POSITION"

SURVEY BY MR. NASH In his opening address in his Hutt election campaign in the Petone Labour Hall last night the Minister of Finance (Mr. Nash) traversed n Wide range of subjects of both national and international interest. There were only a few seats vacant in the hall and people were standing in the back. Interjeetors were persistent throughout Mr. Nash's speech, which lasted for nearly two hours; but the majority of the audience Were friendly, and he was greeted with prolonged t applause at the start and finish of hig speech and at the end of the meeting- . A feature of the proceedings was the length of question time, which occupied an hour. Some of the questioners made small speeches of their own. The Deputy Mayor of Petone (Mr. H. Green) presided over the meeting, at the end of which a motion of appreciation of and confidence in Mr. Nash, moved by the Hon. J. dimming, M.L.C., was carried with acclamation. "The currency, credit, and banking systems o c the Dominion are in a better position today than they have ever been in the Dominion's history." said Mr. Nash. He said that no one would have dreamt ten years ago that New Zealand would be able to find £230,000,000 for three and a half years of war and still maintain the country's living standards, yet that had been done. That sum had been spent up to March 31 last, and if it could be found to run the war it was going to be found to build the peace. (Applause.) Of the £230,000,000, continued Mr. Nash, £88,000,000 had been raised by taxation, £124,000,000 by way of loan, and the balance by Lend-Lease. Some of the latter amount had been subscribed for at 2\ per cent, and the balance at 3 per cent, compared with the interest on loans in the last war of 4 to 4£ per cent., free of income tax, which would make it worth 7 to 1\ per cent, to people in the higher income brackets. The interest rate paid in New Zealand today was lower than at any previous period in its history. A voice: Why have it at all? Mr. Nash: If our friend, knows how to get goods without paying for them he had better come and be The rest of the remark was lost in a roar of laughter. Mr. Nash said that he knew of no way of getting something for nothing. Voices: Hooey. Yes there is. Referring to "charlatans" who talked about debt-free money, Mr. Nash said he could never find anyone who could tell him what debt-free money was. GOVERNMENT CONTROL. Control of the country's finances was completely and entirely in the hands of the Government, said Mr. Nash. Nobody else had a say in it. The Governor of the Reserve Bank was required by law to carry out the policy of the Government as indicated by the Minister of Finance. "There is no country in the world where the credit and currency system is more controlled than it is in New Zealand," said Mr. Nash. Mr. Nash said that the whole of the State rental houses had been constructed from funds provided by the Reserve Bank and that the purchase of all the primary products by the Government had been made possible by the provision of funds by the Reserve Bank. Immediately after taking office the Government bought out the private shareholders of the bank and since 1936 the full ownership and control had been with the Government. In that period, said Mr. Nash, the profit made by the bank since the transfer from private shareholding exceeded £2,000,000, the whole of which had been transferred to the Consolidated Fund for the relief of taxation. Referring to the national income of the Dominion, Mr. Nash pointed out that in the year ended March 31, 1935, the total national income amounted to £103,000,000, and that taxation on this income had been levied to the amount of £21,800,000, leaving a net income after all taxation had been paid of £81,800,000. During the last financial year, said Mr. Nash, the total national income amounted to £260,----000,000. Of this sum £86,800,000 had been taken in taxation, leaving" a balance of £173,200,000, or 112 per cent, increase in net income after all taxation had beenppaird r for the year 1943 as compared with the year 1935. During this period the retail index figure had risen by 32.6 per cent. This, however, only showed that for every £32 12s payable by way of increased cost of living the net income had gone up by £112. An interjector said that that was due to longer hours worked, to which Mr. Nash replied that the people did work longer hours but they did earn the money. "You have to work to get money," he said, "but in 1935 you couldn't even find any work to do." (Applause.) The sooner New Zealand reduced Jier overseas debt the better, because to meet the payments on it New Zealand had to send away goods for which she got no return, said Mr. Nash. A voice: Why not repudiate? "THE MOST HORRIBLE THING." "That is the most horrible thing I have ever heard," replied Mr. Nash. He said that the people of the Old Country and of New Zealand had put their savings, for which they had worked, into loans to enable the Government to run the country and to save the y country, and anyone who suggested "repudiation had not the slightest sense of honesty. (Applause.) One of the outstanding achievements of the Government during its eight years in office had been its reduction of the overseas indebtedness of the Dominion by £11,412,000, said Mr. Nash. This sum constituted a reduction of debt greater than for any like period in the history of the Dominion, and along with this reduction sterling funds had still been built up, so that v.«e now had excellent reserves to meet the requirements of the Dominion when peace came. Since the war started the sum of £29,250,000 had been expended by the British Government under the Memorandum of Security Agreement on New Zealand soldiers in North Africa and on New Zealand airmen in Canada. That was up to March 31 last. The British Goyernment charged New Zealand with interest on that amount. Up to March 31 New Zealand had repaid £19,000,000 of the £29,250.000, leaving at that date £ 10,250,000 still owing. Before the presentation of the Budget the Government arranged to repay another £2,250,000, reducing the debt to £8,000,000, and when the Third Liberty Loan was oversubscribed by £4.000,000 they paid that amount in sterling off the debt, leaving only £4,000,000 owing, but some extra debt had been added since March 31.