DOMINION FINANCES

New Zealand Herald, Volume LXX, Issue 21663, 1 December 1933, Page 12

DOMINION FINANCES

" NOT OUT OF CONTROL " DEFENCE BY MR. COATES AUSTRALIAN CRITICISM COMPARABLE QUOTATIONS [BY TELEGRAPH —SPECIAL REPORTER] WELLINGTON, Thursday "The suggestion that the publicfinances have - been drifting for some years past and are out of control is unfounded and unjustified," said tho Minister of Finance, tho lit. Hon. J. G. Coates, in an interview to-night, in which ho replied to statements made by Mr. Thomas Buckland, president of tho Bank of New South Wales, at tho bank's annual meeting in Sydney.

Supplementing tho remarks he made in the House last night, Mr. Coates said Mr. Auckland's criticism showed an incomplete knowledge of ftew Zealand affairs, and that accounted for some erroneous inferences contained in it. Regarding the gold coin to bo taken over by tho Reserve Bank, Mr. Coates said every aspect of that question had already boon thoroughly discussed, and there was no occasion to go over the ground again. " As for the allegation that tho credit of tho Dominion in London must suffer," continued Mr. Coates, "I can say only that tho decision reached is definitely endorsed by authoritative and disinterested opinion ir>. London. Tho suggestion that tho public finances have been drifting for sorno years past and are out of control is unfounded and unjustified. " Tho floating debt is the best indication of the position. As far as this Dominion is concerned, Treasury bills outstanding in the hands of tho banks and tho public as at March 31 last amounted to £2,380,000 only, and these bills wore fully covered by liquid assets held in London. Reference to the Budget will show that tho ( estimated deficit for this financial year is apprpximatelv £2,000.000, and not £4,500,000 as stated by Mr. Buckland. Furthermore, the additional statement that the present position indicates a deficit of £9,000,000 is absolutely unwarranted and clearly shows that Mr. Buckland has very little knowledge of conditions in New Zealand. Everything points to the Budget estimates being realised. " The remarks concerning the payment of interest on London debt by local authorities are unwarranted. Tho Government went out of its way to clear up the difficulties that arose, and the London authorities concerned are now satisfied with the position generally. " A good deal was said about the damage to New Zealand credit in London. I dislike making comparisons, but, since Australia is quoted by way of example, I would merely like to say that the latest quotations for some comparable , stocks on the _ London market, excluding accrued interest, are: —New Zealand, 5 per cent, 1946, £lO9 ss; Commonwealth, 5 per cent, 1945-75, £IOB 8s 9d. " Recent conversions on the London market provide another illustration. On September 13 a Commowealth conversion into 32 per cent stock was issued at 98. while on October 3 a New Zealand loan, which in effect was practically a new issue, was heavily over subscribed at per cent at 97. Incidentally, these terms were more favourable than for any previous issue during the last 30 years,"