War Economy
The Rising Cost of Invisibles1
The Rising Cost of Invisibles1
In the last decade attempts to relax or remove import controls have been hindered by a quite rapid rise in debt servicing, travel payments and other ‘invisible’ items of overseas expenditure, which have taken an increasing portion of New Zealand's export earnings. To some extent the method of administration of import licensing has aggravated this difficulty.
1 ‘Invisibles' is here used to mean payments becoming due to foreigners, excluding those for imports or capital transfers, less payments due by foreigners, excluding those for exports or capital transfers. Important items are transport costs (£22 million net in 1962–63), investment income (£26 million) and travel (£11 million).
The rising cost of overseas transport and the increasing tendency of New Zealanders to travel have also added to the net outflow of invisible items which have to be paid for in the main out of export earnings, so restricting the amount available to meet the cost of imports.
It was inevitable, in any case, with the overseas deficit on current account averaging £25 million a year between 1951–52 and 1962–63, that the cost of servicing of private and government debt1 would build up quickly.
Chart 85 shows changes in the net deficit on invisibles expressed as a percentage of export earnings.
1 Including dividends accruing to overseas shareholders, interest on loans, etc.
2 Comparable earlier figures are not available.
1 Including private investment as well as government and local authority loans. The figures refer to accruals rather than to actual remittances. A good deal of private investment income is reinvested in the country where it is earned.