WAR EFFORT

Evening Star, Issue 23697, 3 October 1940, Page 13

WAR EFFORT

ECONOMIC CONTRIBUTION OF DOMINIONS GREATER THAN ITALY'S Though the three dominions of Australia, New Zealand, and Canada have a combined population of only 20,000,000, their economic and material contribution to the war effort already ex--ceeds that made on the other side by Italy with a population of 44,000,000. Tills striking fact was brought out by Mr Colin Clark, well-known Australian economist, in a recent world broadcast, now released in New Zealand by the Australian Trade Commissioner, Mr C. K. Critchley. “ The fortunes of war,” said Mr Clark, “ largely depend nowadays on the availability or otherwise of equipment, food, and trained men—in other

words, a vast economic effort lies behind every _ military effort. A country’s capacity to make economic effort depends, in the first instance, on what it can produce. Equally important, however, is the amount required for consumption for purposes other than war. The more it can produce, and the less it can consume, the greater will be a country’s war effort. NATIONAL INCOME. “ The amount which a country can produce is generally known as its national income. Investigations of national income have been my special sphere of work for a number of years. National income produced in Australia in the year ended June, 1940, was computed at £866,000,000 Australian; and for the year ended June, 1941, it is provisionally estimated at £900,000,000, in sipte of expected depletion of manpower by enlistment. These figures are well above the previous record of £708,000.000 in 1929, at a time when much higher prices were being received for Australian exports than now. “ War expenditure to ho incurred actually in Australia during 1940-41

is estimated at £160,000,000, or 18 per cent, of the national income. This will represent expenditure on the building up of a large Army, Air Force, and Navy in Australia, and on tho training of Australian troops for service overseas. “ Both Britain and Germany are at present devoting over 40 per cent, of their national income to war expenditure. The Australian figure, of course, falls short of this, but it is on a level with, or slightly iiigher than, the Canadian. This is largely explained by the fact, that Australia and Canada made a late start. In 1938. neither dominion was devoting as much as 1 per cent, of its national income to defence purposes, and delay in building up a war programme was inevitable. “ Obstructions, however, are being rapidly overcome, and oven this current year an upward revision of the programme may be possible. There is no doubt that next year a substantially increased contribution to the war effort will bo made. SOME COMPARISONS. “ It is of some interest to note that current expenditure'on war and defence

amounts to 7.3 per cent, of the nationaj income in the United States, about 15 per cent, in Russia, and 28 per cent, in Japan. . . “ In comparing national income between one country and another it will not suffice simply to convert currencies at present-day exchange rates, because the actual purchasing power ot money in different countries may vary widely. It is, however, possible to compare national incomes in terms of ‘ sterling purchasing power.’ That is to say, we can state the actual quantity of goods produced in each country in terms of their sterling value. On this basis we obtain a figure of average production per breadwinner of £3OO in Britain and Canada and £2BO in Australia. For Germany the figure is only £l9l, and for Italy £92. For Japan and Russia also, it is interesting to note, tho figures are £97 and £B7 respectively. The capacity of the dominions to contribute to the war effort is therefore much greater than would appear from their population alone. Strictly speaking, it depends not so much on their productivity as on tho excess of their productivity over current requirements. The process of reducing civilian rc-

quirements has begun, though later than iu Great Britain, and will be progressively continued. SPENDING RATE IN ITALY. It is clear that in a poor country such at Itily civilian requirements can only be reduced in a limited degree, and if attempts are made to carry this reduction far standards of health and even of civilised living are endangered. In 1939-40 the Italian Government spent 40 per cent, of the whole national income, half on civil and half on military requirements, and, indeed, it is doubtful if Italy can spend at any greater rate now that she has entered the war. “ The maximum economic contribution which Italy can make, therefore, is only £2O for each breadwinner. Australia and Canada are already contributing £45 to £3O for each breadwinner. as Britain is at present. Thus Australia, Canada, and New Zealand, with a combined population of only 18.500.000. arc already making material contribution to war effort greater than Italy's, and, moreover, one which

will increase rapidly while Italy’s will probably decline. “ Australia is shipping goods at tin rate of 2,500,000 tons of wheat and 500.000 tons of sugar a year. These are enough to provide continuous bread rations for half the British population and continuous peace-time sugar con. sumption for a quarter of the British population; on the basis of war-time rations we are supplying more like hall of Britain’s sugar requirements. “ At present we are shipping at the rate of 600,000 tons of wool a year, representing Britain’s entire peace-time requirements with 30 per cent, over; 300.000 tons of meat a year, or 10 pe* cent, of Britain’s peace-time require, ments, and 100,000 tons of butter a year, or just under 20 per cent, of Britain’s peace-time requirements. In the case of wool, Britain now require* as much as she did in peace time, mainly for uniforms and for manufacture for export. ' In the case of meat and butter, as with sugar, war-time rations are below peace-time, and Australia’s contribution to Britain’s requirements is greater than the percentage just given.’’.