INDEMNITY TO BANKS

Otago Daily Times, Issue 21987, 23 June 1933, Page 10

INDEMNITY TO BANKS

CHARGE ON EXPORTED WHEAT MINISTER REJECTS PROPOSAL (Special to Daily Times.) AUCKLAND, June 22. The proposal of the Auckland Chamber of Commerce that the wheatgrowers and not the Consolidated Fund should meet any charge incurred in recouping the banks for exchange benefits received by them from the export of surplus wheat was the subject of a further communication from the Minister of Finance (Mr J. G. Coates) to the chamber this morning. Following the reply to its original protest in April, the chamber forwarded another resolution in which it pointed out that the wheatgrower, unlike other producers of exportable produce, had a guaranteed price for as much of his produce as was sold locally and was in a favoured position. The resolution also contended that the Government had discriminated against the gold-mining industry by the imposition of a special export duty of 12s 6d an ounce when it would otherwise have benefited substantially from the higher exchange rate. “ I would like to point out that the arrangement for stabilising the wheatgrowing industry in New Zealand was in full operation long before the exchange adjustment was made,” stated the Minister in his letter. “ The position in regard to wheat sold internally is thus much the same as it was previously (although a reduction was made in the stabilised price), but wheat disposed of abroad had to be sold in the world’s markets and was in exactly the same position as other exports. Furthermore, the fall in the prices of other primary products doubtless led to greater attention being paid to wheat-growing and to the extent that growers last season were compelled to average the internal and external prices they were in a worse position than if they had been able to dispose of their crop internally. A surplus for export is exceptional, as hitherto the local supply has been insufficient to meet the requirements. “The statement that your chamber is not suggesting that the wheatgrower should lose the ordinary benefit of the exchange is not understood. If the proceeds from the export of wheat- are deemed to form part of the surplus Loudon credits and the cost of purchasing covered from the industry, exporters will receive no benefit from the exchange whatever.”

With regard to the duty upon the export of gold, the Minister stated that this taxation measure was adopted by the Government following upon the report of the National Expenditure Commission in 1932 and the relative legislation was promoted with the object of obtaining more revenue for the Consolidated Fund quite apart from and prior to the raising of the exchange rate in January last. “ Gold is in a position to stand it, for its price has risen in the same proportion as the price 'of other things has fallen,” the letter prqceeds. “Consequently, the only reaction of the exchange position upon gold exporting was to increase the profits derived from this business.” Having regard to all the circumstances of the case the Minister was unable to agree that exporters of wheat shouljl be deprived of the benefit of the exchange, i