TRADE BALANCE

Hawera Star, Volume L, 20 June 1930, Page 5

TRADE BALANCE

POSITION ANALYSED. “INVISIBLE” ITEMS. (Special To The Star.) WELLINGTON, June 20. “Most of you will have seen references in the newspapers to the fact that for the year ended March 31, 1930, our exports, £49,045,817, were slightly less than our imports, £49,167,914. The previous year showed an excess of exports over imports of no less than £12,048,478,” stated Sir George Elliot in fiis report to the Bank of New Zealand’s annual meeting to-day. “The bare figures of our exports and imports for any period do not give a wholly correct indication of the Dominion’s financial relationship with the rest of the world. Many other factors have to be taken into account. These are frequently referred to as ‘invisible’ exports and imports. “It may be thought that in the case of a country like ours these ‘invisible’ items are small and make little difference to the total. That is however, not the case. “The largest single item in the nature of ‘invisible’ imports is the interest paid on the various Government and local body loans which have been raised overseas. Interest on these loans has to be paid in exactly the same way as imports have to be paid for. The amount involved for the year ended Maxell 31, 1929. was made up as follows: Interest on Government loans payable in London £6,698,389 interest on Government loans payable in Australia 269,430 Interest on local body loans payable in London or Australia 1,319,000 £8,286,519 “New loans which are raised abroad —other than purely conversion or redemption operations, constitute a contra to these payments. When a loan, which is not a conversion or redemption loan, is raised overseas, New Zealand receives money in the same manner as it does when produce is sold.

“Other items wliich tend to make the trading figures confusing as a guide to the Dominion’s conditions are the expenditure by our own people on holiday abroad and the corresponding item of expenditure in New Zealand by visiting tourists. “While the foregoing are probably the largest invisible items in our National account of receipts and expenditure, there are numerous other items all of which affect the ultimate balance and of which no statistics are available. The majority of the insurance companies and banks doing business in New Zealand are overseas corporations. In so far as their premium monies or incomes are unequal to their expenses. arid losses in the Dominion, the balance has to be adjusted eventually by a transfer of funds to oi from their respective head offices. Our overseas shipping also is to a large extent handled by English Companies. Freights paid in New Zealand, so far as they are not expended in the Dominion in wages and payments for local services, and stores, have to he transferred overseas and arc, therefore, invisible imports.”