LARGE SAVING.

Star (Christchurch), Volume XLIV, Issue 539, 23 August 1932, Page 1

LARGE SAVING.

Effect of Conversion of Overseas Debt. An annual saving of £1,600,000 in the interest bill on New Zealand’s external debt is estimated to be made in the event of the conversion of these loans to 3£ per cent interest. New Zealand’s total debt under all headings in London is about £155,000,000, and, after deducting the amount of the Rinded war debt, approximately £130,000,000 remains. The interest charges on this amount are between £5,000,000 and £5,500,000 annually; and a conversion to 3£ per cent would save New Zealand £1.3 million a year, which, with the saving on the I funded war debt, would bring the total j saving to approximately £1,600,000. ( An economist with whom the question was discussed to-day said that, even if a conversion loan were successful, it still remained to be seen whether . at such a lower rate of interest payi ment could be maintained. , It also had to be remembered, he » said, that, in connection with the conversion of the debt privately held, a certain amount of finance would have to be available to buy out dissenters It was suggested by the economist that, in view of the success of the English conversion, consideration should he given by the New Zealand Government to the conversion of the debt held internallv in the Dominion This amounted > to £117.000,000 and included £43.000,000 • of war debt. Its conversion might well be considered as an alternative to the present 10 per cent stamp duty. As deficits were being financed bv means of further borrowing, it would appear j inexpedient to continue the policy of i making provision for debt until Budgets were again balanced (A statement by the Prime Minister appears on page 5.)