WELLINGTON NEWS

Hokitika Guardian, 18 March 1930, Page 2

WELLINGTON NEWS

AUSTRALIA’S EFFORTS. (Special Correspondent.) WELLINGTON,. March 15. Australia is making almost frantic efforts to get out of the hole that it has dug for itself. The F'ederal Socialistic Government started off by raising the tariff, and its seems probable that it will be raised still higher. It has already tampered with the Commonwealth Bank and promises to - .go a little further and antagonise tli.e trading banks by authorising the State Hank to engage in ordinary banking business and for this purpose the Bank Act is likely to be amended by separating the note issue department from the banking department on the lines.of the Bank of England. When the Labour Government is done with the Commonwealth Bank it will be the beginning of the end. Australia's credit balances in London are a diminishing quantity and that is why the exchange rate on London is nominally 4 and l-Bth per cent .for telegraph ic transfers. The Commonwealth cannot borrow in London, ndr yet can any of the .States because unfortunately British investors have lost confidence in the Commonwealth. The City of Sydney recently raised a loan in New York for which it had to pay 6 per cent, and the last Commonwealth loan' floated in Australia carried' interest at the rate of 6 per cent.

The news was broadcasted that this loan was overscribed as though it was a remarkable event. Those with money to invest would have been foolish and they not seized the opportunity to secure such gilt-edged esciirity at such a high rate of interest. Australia re-, contlv shipped £7,00(1,000 in gold to London to hold up its credit and is obliged to make l further shipments for the same purpose. The Federal Government is doing all sorts of things to try and meet the situaton but it resolutely refuses to touch the sore spot that is causing all the trouble. It is interesting to note that the Federal Auditor-General in his report is somewhat outspoken in regard to Australia’s extravagance. This is rather late for sucli talk, 'still what he says applies in some respects to N.Z. also. Although we'are not suffering to anything like the samehextent as Australia it. is up to us to go slow with extravagant xpenditure: We can reduce expenditure in many , ways without causing harm to individuals. But even if the advice of they Auditor-General is observed in letter and spirit that will not bring about 'a recovery although it will certainly, relieve the position. The problem of the moment is how to reconcile falling commodity prices with stationary wages. If the price problem could be brought within the political zone and the Government was able .'to Regulate prices the problem would be : so\ved quite easily, but the Government has no power over world prices. It "lias with its political interference fixed wages and it is this rigidity, this want of relisiliency that is the seat of the trouble. Neither the Federal Government nor the N.Z. Government will allude to the matter let alone make any suggestion of amending the Industrial Conciliation and Arbitration Act.

Through that measure we have developed a horde of parasites who are making more than award wages out of the game and these men will protect their vested interests by fair means or by other means. Coarse language and harsh expressions are their chief weapons for their clientelle enjoy hearing ministers and men in responsible and fiduciary positions flogged with tongues of bitterness. It is safe to assert that all the schemes tried both here and in Australia to relieve unemployment are merely palliatives. When the works in hand are completed there will be a recurrence of unemployment. But apart from that there is every indication that the volume of unemployment will grow to such proportions, and that very soon, that jt will be impossible to find work ifor all., ..Mr .G, Gullett, a member of the Federal Parliament, had the courage to say publicly recently: “Work is the essential factor. The demand,of: the moment is for reduced cost of production for a supply of labour on a more profitable basis than is now offering. The retention of the existing fabric of .industrial awards is the strongest factor in our • unemployment and its progressive growth.” How to square falling commodity prices with rigid wages is the problem. It cannot be squared* and continued unemployment is inevitable.