EXCHANGE SURPLUS

Rotorua Morning Post, Volume 3, Issue 689, 15 November 1933, Page 5

EXCHANGE SURPLUS

(Press Assn.—

AMOUNT TAKEN OVER already more than sterling funds anticipated for year BENEFITS TO FARMERS

By Telegraph — Copyrlght).

Wellington, Tuesday. Referring to the exchangfe sujrplusses in the House to-day the, Minister of Finance, Rt. Hon. J. ■ G-. Coates, said that the budget showed that the Government had taken over from the banks in the first half of this financial year, an amount of £13,345,000 whereas statistics showed that there was, for the first nine months of the calendar year, ' a surplus of London funds of only £10,250,000. This would indicate that the Government had already takert over from the banks more than the surplus sterling funds anticipated for the whole year. ' ' ' There might, of course, be other factors affecting the position such as the transfer of capital to New Zealand. The Minister said that it was also estimated that about £10,000-,-000 in sterling funds was requiredc Referring to currency- depreciation, Mr. Coates said that it would bq necessary at least to maintain the present rate of 'exchange. The nett increases to the New Zealand farmer as a result of the rate were.: Butter 33.6 per cent, cheese 37 per'cent, wool, 28.7 per cent, lamb 40 per cent, wether mutton 45 per cent, ewe mut- ^ ton 70 per cent, ox beef 47 per cent. Mr. Coates said that the reason why the percentage increases were greater than the exchange was because the exchange was calculated on f .o.b. prices whereas what the farmer received was the price, less the cost from the farm to f.o.h. It would therefore be seen that the farmer really gained a greater advantage than would at first appear as a result of the exchange assistance. On' tKd other hand, the farmer did not hate to pay the full 25 per cent. fextrA ofi most of his imports. The operation here worked the opposite way. -For instance calculated on such itenis as basic slag, the percentage increase in NeW Zealand was only 18.5 per cent. * Mr. Walter Nash (Labour, Hutt), said that all that had happened in connection with the exchange rate so far as New Zealand was concefnCd was that the balance of the people had been specifically taxed for the benefit of the farmers. New Zealand had not received a fraction .of an penny more from the Old Country for her goods. All that the producers were receiving was something levied upon the remainder of the people in this country |. If New Zealand was dumping butter and cheese into the Old Country irrespective of cost and charging the people there low prices because the people here were paying 25 per cent. toward the cost, then every word that Mr. Baxter had said was true.