New Zealand's Ability To Import Governed By What Balances She Has Overseas

Wanganui Chronicle, 30 January 1948, Page 5

New Zealand's Ability To Import Governed By What Balances She Has Overseas

MR. NASH EXPLAINS POLICY AS GOVERNED BY NEW CHARTER

(Press Association) WELLINGTON, Jan. 29 A limit to imports was exclusively determined by the exchange. that was likely to he available at a given time, stated the Minister of Finance (Mr. Nash) in justifying Ntw Zealand’s import selection policy at the United Nations Conference on Trade and Employment, in Havana, Cuba.

Mr. Nash was speaking to the article of the charter drafted at the preliminary conference held in Geneva, which empowered a country to impose import restrictions to the extent necessary to forestall an imminent threat of, or to prevent, a serious decline in monetary reserves and to safeguard balance payments.

Mr. Nash said New Zealand had at the moment a fairly substantial balance of exchange in overseas countries—not so much as we would like, but substantial. If New Zealand were able to buy, which was what it was anxious to do, the equipment necessary to replace obsolescent plant and provide for necessary repairs to existing plant in electrical equipment, railways, coal mines, and farm industries, there would not be a penny of the exchange that was at present in reserve overseas, but that would be spent. As soon as those goods became available that capital equipment—in all its forms, whether for State activity, or whether for private activity—would use up the whole of the sums New Zealand had available overseas. It was proposed to take Into account the balance overseas and to add to this sum an amount estimated from the proceeds of the sale of New Zealand’s exports for a given year. An estimate would then be made of the amount required for debt and other services, and for imports, and then a reserve would be provided of a sum .ascertained after consultation and agreement with the organisation. It was proposed to make an agree* ment with the organisation as to what sum legitimately was required as reserve, so that New Zealand could meet debts when due and take into account New Zealand’s trade, which for a small country was very large.

“We have, as far as essentials art concerned, imported to the maximum that we can pay for when goods are available, and when we have the right currency," said Mr. Nash. "We could get a lot from the United States, but no one has any money to pay for goods in the United States. We will, under the arrangement provided here, buy all that we can pay for, and we will not limit imports in any way so long as we have the exchange to pay. The limit to imports is exclusively determined by the exchange that is likely to be available at a given time. Orders for the moment under licence are far in excess of what we can get, and are far in excess of what we can pay for; but we know they are not likely to come and we have a check periodically—once a year all licences are cancelled, but the preceding year’s usual licences may be used for imports against the allocation for the succeeding year." Mr. Nash said he thought that the article was an excellent one. He was satisfied that it met the difficulties of a country working on expansionist lines with full employment and high living standards, so long as they were responsible to discuss the position with the organisation. It would be completely and hopelessly impracticable for countries like New Zealand —there were many others at the conference—to imagine they could have free and unlimited ordering by private traders and still keep on a good, decent, and honest scheme of paying for goods they bought. He hoped that provision would be made for all countries that wanted to do what New Zealand was doing—to buy what they desired to buy—to make sure that, like New Zealand, the orders were linked to an ability to pay and to keep the living standard of all the people, not a few, on good and even levels.