* * * * NEW ZEALAND'S PROBLEMS
If any doubt remained about the seriousness and urgency of New Zealand's financing problems it must surely have been dispelled by Lord Balfour of Burleigh's frank review at the annual meeting of the National Bank of New Zealand. Lord Balfour does not condemn the policy of exchange- control as one of the alternatives open to Mr. Savage's Government; rather he suggests that it has not been applied drastically enough, with the result that hopes of rebuilding the Dominion's sterling balances have been frustrated. Thus, the immediate problem now awaiting solution goes beyond providing for next January's £17,000,000 loan maturity and the financing of the Dominion's defence programme. Apart from these two needs, which may involve as much as £26,000,000, a substantial amount of fresh credit must be made available if, in Lord Balfour's words, " serious dislocation of trade, amounting indeed to a commercial default, is to be avoided." The correct interpretation of Lord Balfour's argument is, I suppose, that it is better to help New Zealand now, before commercial default is unavoidable, rather than allow such default to take place first. I agree entirely that this is desirable and that the achievement of a satisfactorycom- promise is urgent, but I am not sure how it is all going to be done. The Minister who, in the last resort, will have to call the tune, is at present worried not about New Zealand's politics but the financial consequences. If the Dominion's credit is to be upheld, it is surely only the New Zealand Government itself that can supply the essential props, and they seem to me to depend on some modification of present policy. It should not be too difficult for a debtor who is asking so much to give the Minister some assurance that the necessary tightening of the belt will take place.
* * * *
Previous page
