MONEY SENT OUT OF DOMINION

Southland Times, Issue 23732, 2 February 1939, Page 6

MONEY SENT OUT OF DOMINION

GOVERNMENT’S POLICY

BLAMED

IMPORTERS COMMENT ON MR NASH’S SPEECH

(United Press Association)

WELLINGTON, February 1. Observations on the policy speech by the Minister of Finance (the Hon. W. Nash) to the Dominion conference of importers in Wellington last week is made in a long statement issued by the conference committee today. The statement says the Minister’s speech was as complete as could be desired to support the case for the Government in the matter but there were some fundamental points the Minister did not touch on. “Did the Minister deliberately pass over these points because they did not show up in a favourable light the case he was presenting for the Government or is. the Government blind to the existence of facts which are obvious to the public?” the statement asks. Commenting on the three main factors cited by Mr Nash as causing the decline in New Zealand’s funds in London the statement says: “The Minister did not explain that the removal, of funds from New Zealand, because of exchange rate considerations, was because the Government failed to keep its pre-election promise of 1935 to scale down the rate. Those 'who held funds in New Zealand in anticipation of that adjustment have had a long period over which to withdraw those funds. The Minister must have known such a withdrawal would occur. “Even if the Government’s object in deferring indefinitely the scaling down of the exchange rate was an endeavour to keep those funds in the country it had ample time to see how its efforts have failed and shape its course accordingly.” Discussing Mr Nash’s reference to concerted efforts to send money out of the country for better interest rates the statement said that the Minister would find it hard to justify the use of the word “concerted” as from in-’ quiries importers had been unable to learn that persons and/or concerns worked together for the purpose mentioned. The Minister seemed more concerned with making a political point against political opponents of the Government than with giving a complete presentation of the facts. It was quite correct that over a period of years money had gone out of New Zealand for higher interest rates, but the Minister did not mention the very considerable amount of capital that had taken flight through fear and discouragement resulting from restricted interest rates on numerous classes of investment and the crushing taxation on the earnings of capital. There had been ample time since 1936 for the Government to see the effect of its policy on the movement of capital and take appropriate action. Another aspect not touched on by the Minister was the export of capital represented by surplus funds formerly invested in forms of enterprise closed through the Government’s measures. Referring to Mr Nash’s contention that one factor’ had been over-impor-tation, the statement points out that the Government is altogether silent about the extent to which gross overspending by the Government and huge importations for public works and other purposes had eaten into the Dominion’s sterling funds for a long period, thus assisting to a major degree in bringing about the shortage in New Zealand’s overseas credits. The country was entitled to full information on this point in order that it might be clearly seen how importers and employees and through them the people are being made the chopping block for the recklessly extravagant policy of the Government. Finally the statement emphasizes that the shortage in London funds did not steal on the country overnight. The

causes leading to the shortage were not unavoidable and unalterable—in fact they were themselves the logical sequence over a long period of events the Government itself set in motion and regarding which the Government, despite repeated warnings, did nothing. It asks: “Was the inactivity of the Government deliberate in order that the way would be paved for it by results arising from its own policy for the introduction in a time of prosperity of the most drastic scheme of State control of exchange and t an imports scheme to which no other British country has had to fall?”