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AUTHORITY TO BORROW

CLAUSE IN FINANCE BILL CRITICISED HOUSING MONEY FROM RESERVE BANK MINISTER’S REPLY TO MR POLSON (From Our, Parliamentary Reporter.) WELLINGTON. September 13. The borrowing powers in the Finance Bill were criticised by Mr W. J. Poison (National, Stratford) during the second reading debate on the bill in the House of Representatives to-day. He said that although the Minister for Finance (the Hon. W. Nash) had previously talked about creating money, it was now obvious that he had been told by someone in authority to climb back into orthodoxy as test as he could. “This bill commits this country to the borrowing of an enormous sum of money,” said Mr Poison. “The borrowing powers are more extensive than any I have ever seen in a finance bill. I have never seen such a bill giving authority to borrow up. to £14,550,000. This money is apparently to be used on some undertakings that are certainly luxuries, which could easily be postponed until the country is better able to afford them. “The Minister has carefully explained the bill clause by clause, but it is really remarkable how he ignored the clause giving him authority to borrow £4,000,000 for | housing. We were under the impres sion that this money required for housing was to be in the nature of created money. Now it is to be borrowed, instead of created. I wonder what has gone wong?” The Rt. Hon. G. W. Forbes (National. Hurunui): The machinery has broken down. I "Scheme Has Crashed” The Prime Minister, said Mr Poison. had stated that the Government was going to use the credit of the country. Everyone thought the country was in for something new and original, something that would lead the world in the realm of finance. The scheme had clearly crashed. "The Minister for Finance has evidently got himself in a dilemma,” said Mr Poison. “It is quite clear that the weight of the Government leaning on the Reserve Bank of this country has been too heavy, and that it has been necessary to resort to borrowing.” Mr Nash: If you were to ask me where it was proposed to borrow the money, the answer would be the Reserve Bank. Mr Poison: Is the whole of the £14,500,000 to come from that source? Mr Nash: No. We are doing exactly the same now as has been done before. Mr Poison; If the money for housing is borrowed from the Reserve Bank, that is the end of the created money the Minister talked about one tinte. a “The concession to those members of the Government who believe in costless credit is apparently to be withdrawn,” Mr Poison continued. “If borrowing in London is justified at all, now is the time to do it. The proper place to borrow in the circumstances is London.” Mr Forbes: Can the Minister borrow there? Mr Poison: That is the point. The Minister for Labour (the Hon. H. T. Armstrong): Your Government could not borrow there. Loans were used under the orthodox method to replenish the country’s credit, said Mr Poison, and that allowed local funds to be released for use in the country. Prominent members of the Government had suddenly abandoned all their costless dreams. The Government had pinned its faith to costless credit, and costless credit had let it down.

Permanent link to this item
Hononga pūmau ki tēnei tūemi

https://paperspast.natlib.govt.nz/newspapers/CHP19380914.2.95

Bibliographic details
Ngā taipitopito pukapuka

Press, Volume LXXIV, Issue 22506, 14 September 1938, Page 12

Word count
Tapeke kupu
554

AUTHORITY TO BORROW Press, Volume LXXIV, Issue 22506, 14 September 1938, Page 12

AUTHORITY TO BORROW Press, Volume LXXIV, Issue 22506, 14 September 1938, Page 12

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