FALSE PROSPERITY

Chronicle (Levin), 19 February 1949, Page 5

FALSE PROSPERITY

(N.Z.P4L.-

-Reuter.

People Indulge In Orgy Of Luxury Spending

CQK'right) ■

Reeeived Friday, 7 p.m. SYDXEY, Feb. 18. Australia at present is riding the crest of a wave of prosperity whieh has resulted in a marked increase in wages and improvenient in ' working conditions. Fears are now expressed tliat this has ereted false standards of living and tliat Australia will be faced with a serious economic erisis if costs and prices eontinue to rise and if more goods are not produced. The Australian Government has not eased taxes on overtime rates to the extent that workers are encouraged to increase production but within the last few months Mr. Chifley has expressed eoneern at Lhe failure of workers expericncing the benefits of the new wa^e levels, to save jnonev. In a recent address he remarked that many people who are now receiving more monpy than ever before, clioose to spend it on.luxury goods whicli have to be imported, rather than save against a possible fall in wages. Australia is going through a phase of industrial development whicft is straining the resources of labour and materials. Financial observers agree that the economv is seriously distorted and that as yet goods are not being produced in right proportions to raise living standards. Figures reveal that in all but two products, Australian industry shows an improvenient upon the level of last war year. Overseas prices have brought uuparalleled returns but it is still ])lain tliat in most cases Australia is not turning out the volume of exports whicli she achieved before the war.

One authoritv has compWted that whereas the steel inaking capaeitv in Australia is now about 1,7.10,000 tons, the ollicial production of ingot steel last year was onlv 1 ,l!i n.{ M)( ) tons. II e deduces, tlierefore, that owing to many factors including industrial troubles involving the eoal supplv, the basic steel industrv was working at less than three-quart ers its capaeitv. Tn the New South Wales ldack eoal mines ten per, cent of production was lost because of industrial disputes. Australia has about 858,000 more moutlis to foed and bodies to clothe and slielter than before the war so that industrv must provide for a 12'.4 pc'r cent increase in population. As a production expert puts it, " refigerators, cricket balls and ice cream — but far too little food, eoal and steel— that sums up one aspeet of Australia 's ]iroduction problem." An. Australian fact-fmding organisation :has issued 'a report on economic trends from whieh two significant warnings emerge — lirslly. that the present prosperity is unstable and, secondI V, that if export prices fall drasticallv, Australia is bound to sulfer a business depression and unemployment. The report sees danger in the fact that, compared with 19.19, export prices are up by 117 per cent and that metals alone have risen by 1(18 per cent, while within Australia eonirols have limited wholesale price rises to 57 £>er cent and Tetail rises to 1(5 per cent.