DOMINION FINANCE

Gisborne Herald, Volume LXVI, Issue 20003, 31 July 1939, Page 6

DOMINION FINANCE

WARNING NOTE STEADY RETROGRESSION DANGERS OF INFLATION RK ST RIC'TIOX 0 X <' API TAI j VIEWS OF BUSINESSMEN (Tor Press Association.) WELLINGTON, this day. A statement on the financial policy and the economics position of New Zealand, issued bv the Associated Chambers ef Commerce following a meeting oli the executive, says that the securing -by the Fine,race Minister, the Hon. W. Nash, of certain export credits from Britain gives New Zealand some little relief Horn a dangerous situation, and ’Mr. Nash is to foe congratulated on the arrangements he has (been able to make in- the difficult and unfavourable conditions that existed. “At the same lime, we consider it imperative at the present juncture to sound a warning note that the danger confronting the Dominica has not been removed, and the financial position of the country appears to be steadily retrogressing," continues tire statement. “The finance arranged provides no .permanent solution of the difficulties that led to the seeking cf ft. It, remains necessary to repay the short term credit obtained to obviate the necessity of seeking credits again in 1940 and to raise the credit standing of New Zealand, to assist the £17,000.000 lean conversion operations and revive confidence and encourage investment ia the 'Dominion cf local and foreign capital." Must Live Within Income After a review of the causes that led to the Government’s imposition of import selection control, the statement says: “The Government, like the people, must live within its income and must confine its expenditure to what it can get in the ordinary revenue rend :wbat it can borrow from genuine •savings." The adoption of this rule alone would ensure freedom from inflation whatever steps were Oaken new if the rule was not adopted and rigorously •adhered to. The present difficulties, which were n direct consequence of Inflation, must be expected to recur or to become accentuated. The statement takes the view that, since the rising costs of production in New Zealand have 'been a factor tending to check exports, it is essential that the conditions on Public Works Department employment be less attractive than employment in farming and other productive pursuits. Investment Capital The Government is also urged to encourage the return to New Zealand of investment capital by removing the excessive regulation and restriction on commerce .and industry, and by removing the arbitrary limits on interest' rates. A longer term in the periods of labour awards is also advocated, so that 'businesses may be able to plan ahead. It is also considered that there should be greater flexibility in hours and conditions, especially in those industries that contribute to the building up of London funds. The taxation burden on industry, particularly primary industry, should be lightened. This is essential if production is to be maintained and expanded. An attempt should be made to A]crease population by attracting suitable types of immigrants.