INCOMES AND GOODS

Dominion, Volume 35, Issue 261, 3 August 1942, Page 4

INCOMES AND GOODS

The latest issue of the Abstract of Statistics contains an estimate of the aggregate private income of the Dominion in 1940-41, based on receipts from the social security charge, and the total is given as £2\7 millions, compared with f 200.2 millions in the preceding year. The total, it should be noted, includes all social security benefits, pensions and similar payments by the State (£12.4 millions) and it is held by some economists that these payments were , not given for current services but had been included already in the incomes of the taxpayers and so to a large extent are counted twice over. The total figures show the effect of wartime expenditure on the aggregate private income and comparisons with pre-war years would, for that reason, serve no useful purpose. The question that has to be considered, especially by those entrusted with the direction of national policy, is the effect of this upward movement as representing increased purchasing power. It would not be correct to assume, that the whole of the estimated increase shown is available for individual use, for the calculations are based on incomes prior to the payment of income tax. The value of production is set down for 1940-41 at £158.4 millions, being an increase of £15.8 millions on that of the preceding period, and this also, as the Abstract explains, is not all-inclusive, in that the value of professional services and distributive charges are excluded and transport charges only partly represented.. The item that may command most attention is that of £141.4 millions, representing the value of goods available for consumption. That shows an upward move of £15.8 millions in the year in terms of money, but it can have been nothing like that, relatively, in quantity. The values of imports have not been anything like as stable as those of exports. With the latter an increase in values can be assumed to represent larger shipments, but in the case of imports, while the values may give a larger aggregate the actual quantities may’ show a decline. Any control of overseas prices is quite bey’ond the power of the Dominion and if prices continue to rise then the volume of imports probably will continue to contract. That creates the dangerous position of increased purchasing power and fewer consumable goods, with consequent heavy pressure on prices. For that reason there can be no slackening, but if possible an intensification of the efforts made to encourage saving and the placing of surplus funds in one or more of the various forms of war loan investments.