DOMINION FINANCE

Otago Daily Times, Issue 22125, 1 December 1933, Page 10

DOMINION FINANCE

BANK CHAIRMAN’S CRITICISM SOME ERRONEOUS INFERENCES (From Oub Parliamentary Reporter.) WELLINGTON, November 30. “ Any suggestion that the public finances have been drifting for some years past and are out of control is unfounded and unjustified,” said the Minister of Finance (Mr Coates) in an interview to-night in which he replied to statements made by Mr Thomas Buekland, president of the Bank of New South W T ales, at the bank’s annual meeting in Sydney. Mr Coates, supplementing the remarks which he made in the House last night, said that Mr Buckland’s criticism showed an incomplete knowledge of New Zealand affairs, and this accounted for some of the erroneous inferences that were contained in ,it. Regarding the gold coin to be taken over by the Reserve Bank, every aspect of this question had already been thoroughly discussed, and there was no occasion to go over the ground again. “As for the allegation that the credit of the Dominion in London must suffer.” continued Mr Coates, “ I can only say that the decision reached is definitely endorsed, by authoritative and disinterested opinion in London. “ The suggestion that the public finances have been drifting for some years past and are out of control is unfounded and unjustified,” continued the Minister. “ The floating debt is the best indication of the position, and as far as this Dominion is concerned the Treasury bills outstanding in the hands of the banks and the public as at March 31 last amounted to only £2,380,000, and these bills were fully covered by liquid assets held in London. A reference to the Budget will show that the estimated deficit for this financial year is approximately £2,000,000, and not £4,500,000 as stated by Ms Buekland. Furthermore, the additional statement that the present position indicates a deficit of £9,000,000 is absolutely unwarranted, and clearly shows that the speaker has very little knowledge of the conditions in New Zealand. Everything points to the Budget estimates being realised. “The remarks concerning the payment of interset on the London debt by local authorities are unwarranted,” said Mr Coates. “ The 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 also 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 stock® 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 IS a Commonwealth conversion into 3| 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 3J per cent, at 97. Incidentally, these terms were more favourable than for any previous issue during the last 30 years.”