N.Z. ‘subsidising’ Japanese

Press, 27 January 1986, Page 26

N.Z. ‘subsidising’ Japanese

PA Tauranga Japanese pensioners were the only real beneficiaries of the recent

sharp jump in New Zealand interest rates, said the National Party’s spokesman on Finance, Mr Bill Birch.

Mr Birch said the recent 3 to 4 per cent jump in interest rates caused by the announcement of an expected $2OOO million deficit, together with the $lOO million Government stock tender default, were disasters. “It is ironic that New Zealand is subsidising Japanese pension schemes through its high interest rates, at a time when our own national superannuitants and ordinary working people paying high mortgage interest rates are themselves under attack,” he said. Mr Birch said the sudden rise in interest rates meant that Japanese superannuation funds were deriving more than three times the return they could expect in Japan by investing in New Zealand Government stock.

He warned that the Japanese schemes were investing solely for profit and could pull out, leaving New Zealand in the lurch at any moment. “Just two weeks ago, the dollar weakened amid rumours of. a Japanese disinvestment from New Zealand,” he said. “This is the extent of the fickleness of the market. Crowing about how much Japanese investment we are dragging in is burying your head in the sand.” Mr Birch said the average man was suffering under the recent interest rates jump, which would push up mortgages, credit card rates, car repayments, and bank over-