AUSTRALIAN FINANCE

Hokitika Guardian, 17 March 1926, Page 4

AUSTRALIAN FINANCE

TOO MUCH BORROWING

CONTROL BOARDS CONDEMNED. [Australian & N.Z. Cable Association.] SYDNEY, .March 16. In his presidential address at a meeting of tbe Associated 'Chambers of Commerce, Sir Lennon Raws, said the address delivered on such occasion must be influenced, if not dominated, by three events which bad occurred last year, namely, tbe signing of the Locarno treaties, the progress made in the funding of inter-Allied debts, and the return of Britain to the gold stand ard. Politics and finance had become close, ly interwoven during tine war. This meant that problems which were essentially economic were regarded as being capable of political .solution. This was an obstacle to a rapid return to peace and prosperity. The events mentioned had been in the direction of disentangling finance from polities. The funding of inter-Allied war debts bad fixed the financial liability of the various nations and bud prepared the way towards economic restoration and the return of Britain to the gold standard, which had re-established the economic influence as a determining factor in her currency, and which set an example to other nations, who had not yet removed currency from political manipulation. Jn Australia, the grip which politics had got on trade and finance during the war was almost as light as ever. The Commonwealth Government bad greatly reduced its borrowing yet the States showed little disposition to reduce their loan expenditure, borrowing abroad to the extent of £275.000,000 in ten years. This led to a heavy Increase in imports and higher costs of production, which were due in part, to the operations of the Arbitration Court's wage tribunals, to tbe excessive taxation, to the increased cost oi the Government- services, and to many restrictions placed by the Goveriimeni on trade.

Referring to the Common weal l h and State expenditure Irani the consolidated revenue. Sir L. Haws said that, omitting payments by tbe Commonwealth to the States, the expenditure from revenue in 19(3-1-1 was £62.020.OCO, whereas in 1921-25 it was £103.010.000 this being an increase ol lot) per cent., whereas, based on 1911 values, the total production had increased only, by labour, live per cent ol the increase in expenditure. The expenditure on railways, [nisi office, pensions, maternity bonus and interest on sinking funds within Australia totalled £77.000,000, leaving sixteen million to be accounted for by the cost of Government and other services. Referring to the dairy industry, Sir Raws said the problem in dairying was the educating of the dairyman to cultivate bis land properly, improve tiie standard of bis herds, teed them, properly and increase their productively. Sir Lennon asked: Was there the remotest connection between this problem and the stabilisation schemes of the export control hoards and bonuses; *wctr those who advocated such schemes the true friends of the dairyman ; were they no* his enemies, because they diverted his attention from the real problem of all improvement of the quality of the butter exported? Thorough guiding would do much more for the industry than the control of sales.