Dairy Board credit cut attacked as ‘stupidity’

Press, 2 July 1983, Page 2

Dairy Board credit cut attacked as ‘stupidity’

PA Wellington The Goverment’s decision on Thursday to cut the Dairy Board’s access to cheap Reserve Bank credit smacked of economic stupidity and hypocrisy, said the leader of the Social Credit Party, Mr Beetham, yesterday. “The move is a needless and senseless attack on the one major farming sector that does not need access to S.M.P.S,” he said. “It smacks also of hyprocrisy in that while slashing a productive industry’s access to such credit, the Government for its own part intends continuing to help itself to the same 1 per cent money to whatever extent it needs to prop up its own abysmal management.” The Minister of Agriculture, Mr Maclntyre, said, on Thursday that $4OO million worth of the credit — given to the Dairy Board at 1 per

cent interest — would be cut. The Prime Minister, Mr Muldoon, later said that the board’s use of the credit had caused considerable difficulties in money supply management. Mr Beetham said the credit facility, which had existed since 1938, had helped the dairy industry remain viable in the face of considerable pressures, including falling returns on world markets. “Even if, as Mr MacIntyre claims, international agreements such as G.A.T.T. and C.E.R. require New Zealand to review its price support measures, this Reserve Bank facility need not be affected,” he said. “It is simply a marketing arrangement and in no ways an artificial subsidy. “As far as C.E.R. is concerned, if such measures are in fact required, it is further evidence of the total inadvisability of our ever

entering such an arrangement.” Labour’s spokesman on agriculture, Mr Colin Moyle, said the Government’s decision was ill-timed and unjustified. “The Dairy Board is bound to have a lean year even without the reduction in Reserve Bank facilities,” he said. “To now force it to pay market rates for hundreds of millions of dollars will add enormously to the problems that are looming. “Our producer boards are doing a worth-while job on behalf of New Zealand. There is every reason why they should have the support and backing of the nation to carry out this task,” Mr Moyle said. He said the Government’s move was a surrender to the orthodoxy of the Treasury that could only destroy the confidence of one of New Zealand’s most efficient export earners.