N.Z. FINANCES

Greymouth Evening Star, 19 October 1939, Page 4

N.Z. FINANCES

“FOOL AND HIS MONEY.” dominion in disgrace. AUCKLAND, Octtober 18. New Zealand to-day was regarded very much as a fool who, having squandered a’ considerable fortune, now could not pay his bills, said Mr. William Goodfellow, managing director of Amalgamated Dairies, Ltd., and the Challenge Phosphates , Company. Ltd., in an interview to-day on his return from a tour abroad. “I have," he said, “decided to make this frank but rather unpleasant statement because 1 have seen my country as others see it overseas. I also resent very much the loss of our very excellent financial and commercial reuptation. “I am convinced that the country, and especially the farmers, will pay a very heavy price for our folly unless wo are prepared scrupulously to honour our agreements, and to keep our financial engagements in the future. We depend more than any other conn-, try on our exports, and in consequence, on the goodwill of the people of the United Kingdom. Surely these things go without saying. Our Government obviously requires expert financial guidance by experienced people, and if accepted, confidence will very slowly return; but it may take a decade to get back to whore we were.

“Now that New Zealand is in a state of war,” said Mr. Goodfellow, “future financial arrangements are of supreme importance, and the costly mistakes of the recent past surely warrant the appointment of a. financial advisory committee to the Cabinet, of the best men available.” He said that, such experienced and proved men as Mr. Leslie Lefeaux, Mr. F. W. Dawson and Sir James Grose would be worthy of consideration. Such a committee of experts would relieve the Government of much anxiety, would create confidence, and safeguard the all important future financial stability of our country in the critical days to come.”

It came as a shock to find New Zealand credit at such a low ebb, said Mr. Goodfellow. For instance, New Zealand banknotes had practically no value outside the Dominion, and former New Zealanders and friends of the Dominion in London were very concerned indeed at the rapid deterioration of New Zealand’s financial position. One found a “fed-up” feeling of resentment, frequently expressed, by many large exporters who in the past had nothing but praise for our country. Optimistic statements by responsible Government representatives did more harm than good, said Mr. Goodfellow, and in the opinion of many, such statements were regarded as so much political humbug, the fads in regard to New Zealand finances being well known.

OTTAWA AGREEMENT. For New Zealand of all countries deliberately to break the Ottawa agreement, which incidentally was very much to her advantage, resulted in considerable resentment and unfavourable comment by exporters. It was regarded as further evidence of our insincerity. Indeed, a fairly important section ot British manufacturers were at one period so annoyed that they wanted the British Government to cancel the Ottawa agreement because of New Zealand’s breach of contract. Had this demand been actively supported by the federation of British Industries, the most powerful political and commercial organisation in Great Britain, New Zealand to-day might have been paying the same tariff as Denmark, namely 15/per cwt (l|d per lb) on butter and 15 . per cent on cheese. Fortunately the Federation of British Industries refused its support meantime, and the 'outbreak of the European war had postponed further action. “I am forced to the conclusion,” said Mr. Goodfellow, “that our finances are| in a deplorable condition. This is recognised in London, and it is regarded as inexcusable and as a direct-, result of a four.year period of extravagant and wasteful expenditure. It is also fully recognised that, if the present

reckless financial policy is persisted in, New Zealand will be unable to meet her overseas commitments in future. This was probably the main reason why Mr. Nash found it impossible to renew the big £17,000,000 loan due in January next, even at a very high rate of interest. To prevent default the big banks, headed by the Bank of England, came to our rescue; but they insisted on total payment of the entire loan in sterling within five years. Our authorities in New Zealand are evidently unaware that security is more important in London than the rate of interest. Four years ago New Zealand had nearly £50,000,000 standing to its credit in London. Now we are down to bare boards, and have no money to pay our trade bills. It is simply disgraceful. So think London financial experts, who know their job.” Mr. Goodfellow said that the population in New Zealand was at a standstill, and that farming, the main industry, was contracting, after years cf steady expansion, due to high costs. Every possible effort should be made to reduce rather than increase the public debt. “Otherwise we are only making it more and more difficult for our farmers to sell their produce in competition with other countries more economically governed. “I very much regret to say,” concluded Mr. Goodfellow, “that New Zea- " land the world over has lost its excellent financial reputation, and that in j England the white-haired boy of the Empire family is in disgrace.” 1