public debt

The Social Credit bogey—the supposedly huge burden of the public debt—is raised again.

What Social Credit would do about it is open to question. In British Columbia the "Social Credit" government there transferred the public debt to corporations whose debts are guaranteed by the government And British Columbia has the highest per capita provincial debt of any province in Canada. But over the last 10 years in New Zealand the interest cost on the public debt as a percentage of total taxation has been remarkably stable at about 4% And this 4% is not a very heavy burden to bear when one considers the assets and advantages which we enjoy and which resulted from prudent borrowing in the past—our roads, schools. hydro-power stations, buildings—have all added to the public debt

Mr Dickson criticises "a lack of Government enterprise in seeking bilateral trade agreements". One wonders if Mr Dickson is not confusing bilateral trade with barter trade. The National Government has always been in favour of bilateral trade agreements where these would have a real advantage to New Zealand. The Australia-New Zealand Free Trade Agreement in 1965 is one example and bilateral trade agreements have been made with Switzerland, Bulgaria, Poland, USSR, South Korea, The Phillipines and reciprocal trade deals with India and Yugoslavia.

But the National Government is opposed to barter trade (i.e. the exchange of goods for goods) because it believes that multilateral trading policy is the best policy for New Zealand to follow. We buy and sell in the best markets for the best price.

Social Credit's policy booklet states that Social Credit will establish in the Reserve Bank of New Zealand, credits for those countries willing to reciprocate so that trading may proceed unchanged by balance of payments problems. These credits would apparently be in New Zealand currency but one might ask who would be interested in New Zealand currency in an overseas country? New Zealand's is not yet a reserve currency.

Thus Social Social Credit's trade policy insofar as it involves barter, (which I under stand it does) and insofar as it relies government creation of credits, is a government controlled trading policy as opposed to National's policy which is to create a climate in which efficient private enterprise producers and manufacturers and others can export their goods and services.

Getting down to practical politics, what Social Credit would have done to deal with the 1967 economic problems which facco New Zealand, is, like Labour's policy, extremely uncertain and vague. Certainly Social Credit would not have removed subsidies their policy is to increase subsidies. They would not have borrowed overseas as this would have added to the public debt Probably they would have increased [unclear: impor] controls. Had they issued more money [unclear: of] course New Zealand would probably be the seventh slate of Australia today, because. even Social Credit can't create foreign [unclear: ex] change under the Reserve Bank Act. but only New Zealand dollars.

Traditionally Social Credit's validity has depended upon the existence of a gap between the money available (the purchasing power) and the volume of goods and services avail-able for consumption. Social Credit would issue credit to fill this gap. But it seems that Social Credit has realised the fallacies involved in this theory and in its associated A plus B theorem, and has decided to quietly bury them. What appears to remain of the old Social Credit theories is the concept of issuing interest free and debt free money for government and Local Body works. The result of this increased government control of credit has already been explained. [unclear: s] seems therefore thai Social Credit's future position in New Zealand politics could be as an alternative to the Labour Party.