STATE FINANCES

Waikato Times, Volume 125, Issue 20958, 10 November 1939, Page 7

STATE FINANCES

STERLING FUNDS LIMITATION OF IMPORTS HON. W. NASH’S STATEMENT (By Telegrapa.—Special to Times) WELLINGTON, Thursday “One thing is more certain than another, that if we are to keep the honour of the country good we must limit our Imports by the proceeds of the sale of our exports after we have paid interest and other charges overseas,” said the Minister of Finance, the Hon. W. Nash, in a broadcast address to-night. The Minister spoke on sterling funds, and devoted the greater part of his address to the definition in simple terms of currency, exchange and other aspects of elementary economics. After describing how sterling funds were built up by exports from the Dominion, and by other means, Mr Nash said that these funds were drawn upon to finance imports, to pay interest and other loan charges, to meet the expenses of New Zealanders travelling abroad* to pay the expenses of the High Commissioner in London, and to meet the cost of Government purchases. In addition the sterling balances were used to meet dividends paid to overseas investors, to payshipping charges, and in a variety of lesser ways. “Without sterling funds in adequate amount we could not pay for essential imports and debt charges, New Zealanders could not travel abroad and no payments could be made abroad,” the Minister continued. He then described modern trading methods, which he said amounted almost to barter. How Funds Were Expended New Zealand’s sterling funds in November, 1935, totalled rather more than £34,000,000, and they now stood at something more than £8,000,000, Mr Nash said. There was a difference of some £26,000,000. “Where, then, did it go?” he asked. Exports from November, 1935, to September this year were worth £233,000,000. Payments for Government and local body interest charges accounted for £31,000,000, repayment of debts, £8,000,000, and interest and dividends on private capital invested in New Zealand, legacies and other factors, £10,000,000, a total of £49,000,000, leaving approximately £183,000,000 for imports. Actually, however, imports totalled £199,000,000 during the period, a discrepancy of £16,000,000. A difference of £10,000,000 was accounted for by overseas capital withdrawn from New Zealand, and Dominion capital sent abroad for investment or some purpose other than for financing imports.