Interest rate questioned

Press, Volume CXIV, Issue 33606, 7 August 1974, Page 14

Interest rate questioned

(Neu» Zealand Press Association) WELLINGTON, August 6. The Public Trust Office was charging 8 per cent for housing finance up to $15,000 and 8! per cent tor loans above that, the Minister in charge of the office (Mr Fraser) told Parliament tonight.

The interest rate for commercial loans was nine to 10 per cent.

He was replying to Opposition questioning, during the Estimates debate on how the Public Trustee was meeting an inflation rate of 10 per cent. The Leader of the Opposition (Mr Muldoon) said that if the trustee was lending at less than 10 per cent he was subsidising the borrower at the expense of the beneficiary

■whose monev he was investing. Mr P. I. Wilkinson (Nat . ; Rodney) said that if’ interest rates were to be held how ] could the trustee reconcile this with protecting the beneficiary's interest? The Deputy Prime Minis- . ter (Mr Watt) replied that in 1971, when inflation was 11 per cent, the Public Trustee was lending at 7 per cent. Mr Muldoon, as Minister of Finance, condoned that. Did he now say that the Public Trustee should be lending to 'cover inflation, Mr Watt asked. Mr Fraser said the present rate was a reasonable return to the beneficiaries. The Prime Minister (Mr Kirk) said the Opposition's suggestion that interest should be increased to at least parity with inflation would increase costs and stimulate inflation even further.