WELLINGTON NEWS

Hokitika Guardian, 21 March 1930, Page 2

WELLINGTON NEWS

TRADE AND INDUSTRY,

(Special Correspondent.)

WELLINGTON, March 19. Australia is suffering from an enormous trade balance on the wrong side of the; ledger. The adverse trade balance for the seven months is estimated at £25,00.0,000, but that is not the whole story, for in addition the country has to pay about .£29,500,000 annually in interest on her outside debt. At the present rate of decline in export trade ddded to falling prices and allowing for the drastic reduction of imports the adverse trade balance at the end of the fiscal year will probably he not less than £5,000,000 more making the total for the year, say £30,000,000 which added to the interest| payment brings the total up to £59,000,000. It is somewhat remarkable that Australian imports should so greatly exceed exports for the Commonwealth has gone protection mad and has endeavoured to shut out imports with the object of keeping the money in the country and providing work for her own people. Neither objective has been reached for the Commonwealth Bank has had to export large sums in gold and unemployment is increasing in Australia. The country has a hard time in front of it, although those who have securities of one kind and another to unload are making the public believe that bottom has been touched. To meet the present situation Australia has several courses open, She must increase her exports and reduce imports, The latter has been checked by the high rate off exchange and not by the high protection tariff. If Australia is able to borrow in London or New York a few millions for which she would have to pay a very stiff interest that would ease the situation, and she must also export gold which she is doing. If prices of commodities advance which is quite unlikely that that would be helpful. But most of these factors spell unemployment, for the country with its greatly reduced income cannot afford to e?nploy the full volume of labour at current rates of wages, and as the present Labour Government dare not countenance wage' re duction it is. difficult to see that' Australia will make a speedy recovery. The very splendid rains recently , experienced .warrants, the belief that there will be an increase in production, but that increase will help to break

prices. The Federal Auditor-General in his benediction advises people to curtail pleasures and luxuries, reduce the consumption of liqour. and elimate mid-week^'Shorse; and pony racing. This is rather hard :on • the Australians for this is part of their standard of living and the Auditor-General advtses them to reduce that standard.

The Australians are not likely to (follow that advice but force of circumstances will compel them to do so and reduction of the general level of . wages is also inevitable, Australia has been reduced to the present unhappy position through labour economies. High wages and short hours have increased the cost of production and the effort to control the means of production, distribution and exchange, the usehold, the “lump suin’’ and a few other glorious economic blunders involving high taxation have helped to bring about the debacle. Australia provides an object lesson for Now Zealand.

So many countries have now adopted the policy of “keep the money in the country” by imposing high tariffs that the trade of the world is hampered. All countries appear to he endeavouring to initiate one-way trade, that is they are all ready to sell to the other fellow and extract the most money from him, but. they do not want to buy from him, quite forgetful of the fact that if the other fellow cannot sell tvhat he produces he cannot buy what other people produce Britain appenrs to have been in the position df the other fellow; but it is evident that she is getting tired;'of . the position. It is obviously absurd for one country to adhere, to free trade while all other countries ard avowedly protectionist. All countries are endeavouring to exploit, and as she cannot sell her products owing to worldwide protection she is unable to buy and what she is obliged to buy is being secttfejl at low prices because she is unab!|;to.l pay,more. Britain in self defence iritist, go ''hi; for a measure of protection or safeguarding, and this was indicated by the president of the Board of nt the Tariff Truce '"'inference at Geneva where he stated that the distressing conditions produced by falling prices had revived and strengthened a desire for more protection ahere there was protection alreadv and had also created a strong demand for protective measures in free trade countries.

The fall in prices is being felt mainly by agriculturalists who must export their surplus production, that is find a market for it outside the country of production. Agriculture is and always must be the principal occupation of the human race. It is a matter of international interest to export to the full any practical proposals for the speedy recovery of industry and commerce likely to he of immediate benefit and to ensure the future prosperity of agriculture.