PARITY WITH STERLING

Evening Star, Issue 21708, 1 May 1934, Page 8

PARITY WITH STERLING

CHANGE WOULD COST NEW ZEALAND £5,000,000 STATEMENT BY FINANCE MINISTER EXPORTERS SLOW TO SEIZE MARKET CHANCES [P»* Unitkd Pgih Association.} AUCKLAND. May 1. “ Doubtless exchange will be kept at 25 per cent. It may come down later by 1 per cent.—that remains to be seen—but I don’t think it will,” declared Air Coates when discussing the accumulated exchange surpluses at Papakura last night. He quoted twenty millions as the figure representing tho surpluses in London. It had been said that the exchange premium should ho replaced by a subsidy, but only the wcathervanes really suggested that. It would cost five millions to revert to parity with sterling. After the Reserve Bank functioned tho exchange rate would be arranged by co-operation between the bank and the Government, and after August 1 there would be no interest to pay on Treasury bills. Continuing, the Alinister of Finance said: “ There seems to be a stacking up of money, and my impression is that we may expect _ lower interest rates. Before forecasting, however, 1 would prefer to wait until the Reserve Bank is functioning and adjusts interests rates _ more in line with the capacity of industry to meet these charges. Air Coates claimed that the raising of exchange had not contravened the Ottawa agreement. “Those who say we have, as tho result of Ottawa, to remove tariffs on United Kingdom imports are fabricating something that is utterly untrue.” The Alinister next referred to the apparent lack of enterprise by the New Zealand exporters to develop new overseas markets after the opening of tariff doors. He recalled that, after protracted negotiations with New. Zealand, the United States agreed to the raising of the embargo on our fruit, and everything -went well until it came to supplying the goods. Fortyeight thousand cases of apples were arranged for, but _ only 480 cases reached tho ship’s side. In the end, however, we sent 10,000 to 15,000 cases to New York to fulfil what was practically an order. It was quite likely the whole country would have to stand the first shock of the cost incident to the establishment of markets in the East and the development of other markets, but once what he would terra an All Red route had been inaugurated the sales could be built up and diversified.