AUSTRALIA’S WAR ECONOMY

Dominion, Volume 36, Issue 34, 4 November 1942, Page 4

AUSTRALIA’S WAR ECONOMY

The outline given by Professor Copeland of the “third, last and most sacrificial stage” of Australian war economy presents what he regards as the ultimate effects of the preparatory stages rather than the further development of policy—the logical outcome of the economic nine-point plan announced by the Federal Government last February and later incorporated in legislation. That plan established the machinery for the'pegging of wages (with power of adjustment for changes in the cost of living), profits, prices for goods and services, for control of interest rates, prohibition of share sales, and investment of capital without Government permission,_ the elimination of speculation in commodities and of absenteeism in industry, and established the control of manpower and property. These restrictions and prohibitions were not all enforced, for modifications had to be made to permit dealings in shares, stocks and land,, and. the. control of profits was said by a joint parliamentary committee to Ire impossible in practice. • . The machinery created included a Federal Production Executive, which had as the executive head the new Minister for War Organization of Industry, and it is evident that some of the conditions which Professor Copeland expects to see in the third stage will be the results of the operations of this particular administration. Private enterprise in the Commonwealth has been placed under a general measuie of control and some so-called non-essential industries., especially in Victoria and South Australia, have been closed down. The rationalization of industry was to be effected by industrial committees, and the professor now looks ahead to the time when civil consumption will be controlled by rationing on a larger, scale. The Production Executive has made a survey of Australian industry and Piofessoi. Copeland anticipates that the future will see a general allocation ot resources, with greater direction of productive methods. Thus far there has been nothing beyond the more complete application of policies and practices that, for the most part, are already operating, but there comes an important addition. Surplus spending will be immobilized.” The predicted imposition of taxation at a maximum consistent with retention of incentive will, of course, tend to reduce purchasing power, but in Australia, as elsewhere, theie is a substantial surplus in the hands of the community and it will be interesting to see what steps are taken to freeze it. Ihe Biitisli system of deferred credits was urged when the Budget was brought down in September. . Perhaps the most interesting feature of the picture presentci by Professor Copeland is that of a people enjoying “a period of much greater tranquility than the present period.” The irksome if. not painful, process of adjustment will. be. over, and the people, it is predicted, will have “reorganized their lives, industries, consumption and general standards of conduct and enjoyment.” Ihe anticipation, apparently, is'of a return to the simple life, although it will be a severely regimented one, and the standard of living will have been reduced far below the accustomed one.