N.Z. Resources Strained

Press, Volume CV, Issue 31057, 12 May 1966, Page 26

N.Z. Resources Strained

Considerable economic activity and strained resources had created difficult problems of financial management in New Zealand during 1965. Evidence of the strain was to be seen in the demand for labour, materials and equipment.

This was said In Sydney yesterday by the chairman of the A.M.P. Society (Mr C. G. Crane), when addressing the Society’s 117th annual meeting.

“Import payments for 1965 total £3Bsm compared with £327m in the previous year and £3osm in 1963. The rise in demand for imports is a natural consequence of full employment, but it does impose a tremendous pressure on the balance of payments for a country like New Zealand where export income is mainly derived from a limited range of primary products and is subject to fluctuation,” Mr Crane said. Pressure of demand also showed up in the capital and money markets where the natural forces of supply and demand had largely been influenced or controlled by various measures introduced during 1965. “New Zealand’s ability to tide herself over temporary difficulties in the balance of payments had been greatly assisted by her recent mem-

bership of the International Monetary Fund and its affiliates,” he added. “Clearly the authorities could not disregard the persistent strain on the balance of payments. However, it is to be hoped that controls and special measures will not be maintained any longer than necessary, because they can have a stultifying effect and can suppress the opportunities for correction of the economy’s fundamental problems.

“The only satisfactory soluiton is to increase the total efficiency of the economy and expand the earnings of the export industries,” Mr Crane said.

It was pleasing to note that during 1965 the Development Finance Corporation of New Zealand began operations. The Society and a number of other financial institutions took part in its formation and the Society’s New Zealand manager (Mr S. J. R. Chatten) was appointed vice-chairman. “The Corporation’s main purpose is to help finance new or expanding industries, especially those based on local raw materials or which are likely to improve the balance of payments.” The Corporation did not intend to duplicate the facilities of the existing capital market, but to meet cases where funds were not already available on reasonable terms and conditions from other sources, Mr Crane added.