DEAR MONEY

Rotorua Morning Post, Volume 2, Issue 364, 27 October 1932, Page 5

DEAR MONEY

("Post" Special Commissioner).

INTEREST RATES IN N.Z. STRANGLING ALL PROGRESS MEMBER'S CRITICISM

Wellington, Wednesday. The need for cheaper money was stressed by Mr. C. A. Wilkinson (Ind., Egmont), in the House of Representatives to-night. He contended that the rate of interest charged by lending institutions was much too high and that the position would have to he reviewed in the national interest. Mr. Wilkinson said that the total of Government, local body, and private debt in New Zealand amounted to £600,000,000. The interest bill was ahoxxt £30,000,000 per annurn which was one third of the national income. In his opinion, the interest charge in New Zealand was far too high and would have to be tackled with a view to hringing about a substantial reduction in the rates. In other countries, people were enjoying cheaper money. In 'Switzerland, only £ per cent. was paid on deposit money by the banks and the Australian hanlc rate was lower than it was in New Zealand. Rates Compared In the Commonwealth, on deposits for three months 2£ per cent. was paid, while in New Zealand, the rate for the same period was 3 per cent. In Australia, the rate for two years was 3i per cent. while th'e rate in New Zealand for the similar period was 4 per cent. New Zealand was borrowing money on treasury bills from the banks at up to 54 per cent. In Australia the rate to-day was 4 per cent. and it was being reduced on November 2i fo 3 £ per cent. The Government should seriously consider why it should pay 2 per cent. more than Australia on its I.O.U.'s, espeeially as New Zealand's credit was as good as that of Australia. Strangling Country "The high price of money is strangling this country," said Mr. Wilkinson.' "If we are going to put 'things right, we will have to bring down the rates of interest. With the fall in interest rate, there would be a fall in rents .as the two go together. I don't believe that most businesses in this country can pay more than 3- per cent. on their money. The rates that the banks are charging are altogether too liigh and as a result, many businesses are' existing ' simply to pay* money to those institutions."