‘State funds used by P.M. for election’

Press, 23 April 1979, Page 6

‘State funds used by P.M. for election’

PA Auckland The Prime Minister (Mr Muldoon) has been forced to reduce the supply of credit because he pumped so much State money into the system last year for election purposes, according to Mr B. C. Beetham. the leader of the Social Credit Political League. Mr Beetham told delegates at the league’s northern convention at Mairangi Bay that Mr Muldoon was, consequently, the author of his own misfortune.

He said that the present credit squeeze had arisen because finance companies were now speedily and continuously recycling the big infusion of State money handed out so freely by Mr Muldoon himself. Mr Muldoon would now have to cope with the secondary credit creation which he had provided for,

but which he now saw as getting out of hand unless additional bureaucratic controls were imposed, Mr Beetham said.

“The answer to the problem is to stop the private creation of credit at high interest,” he said. Any chance of a revival of private interest had been killed by the Government-sponsored boost in the interest-rate structure.

The over-all volume of production in New Zealand for the year ending March 31, 1978, was 2.8 per cent lower than in 1977. “That makes New Zealand the worst economic performer of all advanced countries last year,” Mr Beetham said. Because of this, the quality of life in New Zealand would fall, mortgage rates would rise, and manufacturing would be crippled by lack of funds for new plant to permit diversified

export production, restructuring, and more employment opportunities.

“Families will be crippled by having to pay a base rate of as much as 15 per cent for first-mortage money,” Mr Beetham said.

“Even with wives working, families will buckle under the pressure of finding the money just to pay interest on a housing loan. “Young farmers will not be able to get on to the land, because mortgage interest payments will be so severe.” Mr Beetham said that he predicted an increase in rates, because of increased interest payable by local authorities.

“Credit squeezes and high interest rates are encouraging the growth, and enhancing the power, of the financial aristocracy who are getting extra encouragement to manipulate money for their personal advantage,” he said.