USE OF PUBLIC CREDIT

Nelson Evening Mail, Volume LXX, 30 March 1936, Page 3

USE OF PUBLIC CREDIT

PUBLIC WORKS-AND BUILDING OF HOUSES PRIME MINISTER’S STATEMENT (United Press Association) WELLINGTON, 28th March. Asked on Saturday if the Government intended to finance its policy by Treasury bills or on:its own credits, the Prime, Minister, (the Hon. M. J: Savage) said that 3n the first place, the cost of administration of public'affairs would rest upon the revenues raised from various sources.:' The; carrying, out of public works, the completion of railways, and tlie building of houses would be' provided for by the use of the public credit;

“We contend,” lie said, “that you ; cannot expect the people to be carrying out works of major importance—national public works—from any form of taxation The financing of administration and the financing of capital expenditure are two different things. We have a country here in the making, and the time will no doubt come when what I am saying will not apply. But there is considerable .development to be carried on in various ways, including primary and secondary production and public works of major importance. The carrying out of major public works does not necessarily mean borrowing. It simply means a careful and intelligent use of public Credit.” ' 'The Prime Minister mentioned that the R-'serve Bank Bill would be the first step. It had been carefully measured and would -be carefully taken. There would be a number of other Finance Bills all -going in the direction of carrying out this policy. • Taking the view that guaranteed prices would not destroy confidence, as had been suggested in some quarters, the Prime . Min ster emphasised that the reverse-would be the case. While to-day-the h'nri'gagee’s equity was based upon butter at 82s a cwt. under guaranteed. prices it would be substantially move, 'thus' preserving the equity and maintaining confidence in mortgages.