The Evening Star FRIDAY, MARCH 2, 1928. NATIONAL STOCK-TAKING.

Evening Star, Issue 19805, 2 March 1928, Page 6

The Evening Star FRIDAY, MARCH 2, 1928. NATIONAL STOCK-TAKING.

Tuk Commonwealth Minister ol Trade and Customs makes thh best oi the fact that the imports I'or the iirst eight months of the current financial year (July-February, inclusive) have so shrunk that the duties collected have yielded £900,000 less than in the corresponding period a year ago. He explains that people are following their Government’s belated lead in cutting down their expenditure, ami naturally are doing this chiefly in respect of luxury lines. They have had to do this because of- the bad season, which lias reacted on the volume of exports, and consequently tho balance of trade is being adjusted by a cutting down of imports. This tendency’ has been noticeable for some little time past. Towards the end of 1927 a review issued by the National Rank of Australasia said that fanners and graziers in all the States, excepting West Australia, were facing a year of reduced incomes, and they were more careful in their spending. The turnover in a number of sections of the retail trade had failed to make tho customary seasonal advance, ami consequently many hands had been discharged. The review points out that inability to produce profitably in some instances, notwithstanding tariff protection, indicates tho need lor increased production per man cmployed. Mr Pratten, however, in his capacity of Minister of Customs, seizes on the reduction of imports as a justification for tho high tariffs imposed by the Commonwealth, claiming that it “ affords convincing proof that tho policy of Protection in Australia is gradually becoming more and mure effective.” in saying so he is in striking conflict with a fairly recent official pronouncement by tho Commonwealth Tariff Board, which declared that steadily increasing protective tariffs were becoming more and more dangerous, because each rise was almost invariably accompanied by an increase of wages in the protected local industry concerned, until wages had reached an uneconomic level. The latter view appears to be the correct one, for the pertinacity of unemployment in Australia stands out strongly ns corroborative evidence

Possibly the report framed by the Expert Eiiiancc Committee appointed by the South Australian Government last year summarises the position more clearly than any speech or document bearing on the subject. It says there have been in South Australia (1) an increase of loan indebtedness in seven years by 70 per cent, and in population by only IS per cent.; (2) a doubling of the interest bill; (3) a doubling of State taxation; and (4) a very much smaller increase in production. Since the war, the report states, the Government and the people alike have developed a strong inclination to spend money with much optimism and with some disregard lor the consequences. Heavy taxation is already hampering the progress of South Australia. The buoyancy of State revenue is showing signs of being checked. Consequently loan expenditure must be curtailed to the lowest possible level. The report goes on to state that the metal industry shows signs of disappearing. The butter industry is another that has fallen on evil days. The remedy chosen to help the producer is a form of inverted Protection, making the consumers in Australia pay for the alleged loss on shipments oversea. This, the committee says, is at best only a palliative, and is economically unsound. The wino industry alsq shows signs of falling behind, and two other important industries—sugar and dried fruits—are drifting farther iu the wrong direction. The report adds: “ lb is true that wool and wdieat remain without artificial support, but how long can they maintain their output against ever-increas-ing costs? it is important to consider whether the tariff wall has been built too high, whether the Arbitration Courts arc more to blame, or whether both, operating in a vicious circle, are responsible. It is of paramount importance to consider how far our obligations to pay external interest by exporting primary products must govern our cost of production and standard of expenditure at home. It is inevitable that some changes must be made to permit increased primary production, cheaper cost of living, cheaper manufactured goods, and more employment.” “ Changes must he made to permit increased primary production " —this appears to be the keynote of all expert advice which is being showered on the embarrassed Governments of Commonwealth and States in Australia. Sir Wallace Bruce, chairman of the Associated Chambers of Commerce, reiterated it at the annual conference at Hobart this week. Sir Robert Horne. ex-Chan-ccllor of the Exchequer in Britain, said much the same thing in Sydney a lew days previously. This distinguished visitor advised: “You should not place yourselves in a position in which you would be unable to use your best assets. You have great lands w'hieh yield you grain and sheep which yield your fleece. Do not place too great a burden on these great industries. . . . The

accounts of some of the Australian States reveal some very awkward figures of losses on State ventures, and many things the States have done on borrowed money have not fructified. Indeed, there are large sums o£ capital expenditure standing on the books which in an ordinary business would have been written off long ago.” Somewhat parallel conditions were indicated in New Zealand by Mr Hawken, Minister ol Agriculture, in a, speech this week in Auckland province. The ownership ol land, he says, is not now fashionable, and ho finds little or no ge'nuine demand for land among the people to-day. Full advantage has not even been taken of the offer of land for

nothing, conditional on certain easy improvements being effected on it

within ten years. Worse than this, the Minister admitted, “the Government has been hard put to it to keep established settlers on’the land. We have to wipe out the mistakes of twenty years ago.” He instanced a case where two decades ago the State bought from the Maoris 15,000 acres for £3 an acre. This figure had proved so much more than its value that recently it had been written down to 12s 6d an acre. The writing down of assets is not a pleasant task when a business is being overhauled, but it appears that it will have to bo undertaken in many directions by those States which are really in earnest about economising in their expenditure and putting their finances on a sounder basis.