WELLINGTON NEWS

Hokitika Guardian, 11 April 1930, Page 2

WELLINGTON NEWS

AUSTRALIA’S PLIGHT

(Special Correspondent.)

WELLINGTON, April 8

The Commonwealth of Australia is experiencing a very serious crisis clue first to its inability to raise loans overseas, secondly to the extravagence of Governments and people during the past 10 years or more, and lastly to the heavy decline in prices, and to biing about a recovery the Federal Government is floundering because it is in a panic. The present position can be traced to the domination of Labour Unions and Labour rule, with its 44 hours week, go-slow, stop-work meetings and job control to support which there has been extravagent borrowing and spending, and the confidence of British investors in Australia is at •zero. It is admitted that neither the Federal nor the State Governments can borrow either in London or New York. The Federal Government has been obliged to borrow in Australia and pay 6 per cent, for the money. It will be recalled that on the eve of assembling of representatives to the Imperial ferencq a pamphlet was circulated by two London stock brokers directing atteention to the excessive borrowing by Australia and pointing out the troubles ahead. The authors came in for some severe criticism but it is obvious now that they were right in their diagnosis of Australian conditions. Australia has lost the confklehce of the British investor and must now rely on its own resources. Loans raised by Australia abroad totalled in June ,pf last year: £572,286,886, and since the Common-] wealth has raised in London £5,000,000 j on Treasury Bills. The interest payable on the money borrowed abroad amounts to £29,500,000. Hitherto the aim of Australia has been to borrow each year what will provide for this interest as well as the material it requires . |

The original proposals placed betfore the Loan Council for borrowing tins year was about £40,000,000, this was cut down to £25,000,000 and the force of circumstances has reduced it to nil for the Commonwealth has not been able to raise money abroad. The Sydney City Council borrowed about £2,003,000 in. New York at a high rate 'of interest. The Federal Government has tampered with the tariff and has made frantic efforts to reduce imports. Fqr the 7 ■ months to end of January last the exports from Australa amounted to £65.969.019 and the imports aggregated £87,224,915, so that there was, an excess of imports of £21,254,996. Later figures .will probably show that the adverse trade balance has increased by several millions more because it is not possible to suddenly curtail imports and and furthermore wool values have receded further and wheat prices also since January. The embargo on certain luxury imports, the heavy duties; on other goods together with a prohibitive primage duty will have the desired effect before many months are over, but what other effects will the curtailment of imports have..- ' • The Customs revenue must contract and this has been the principal source olf income in the Commonwealth. The deficiency in this direction must he made up by increased direct taxation. Further those thrown out of work will not be fit to take to pick and shovel work. Rcently the Prime Minister of the Commonwealth broadcasted an appeal to .farmers to grow more wheat to help to correct the trade balance, hut he ommitted saving anything about the cost of production. .Yet this is the crux of the whole question. Reduce the cost of production and it will increase. A reduction in the cost 'of production involves a reduction in the tariff and also in wages all round ;so that what the farmer has to buy to enable him and his family to live will he reduced in price. The primary producer cannot and will not hear the whole of the burden caused by the fall in the nr+ional income.

This nnp 1 ies with equal force to this Dominion. Those who have continued employment have not. suffered hut those who have been placed on part time and those who have been put off altogether are the sufferers. They are bearing the burden that all would bear were there a general reduction in the rate of wages. Employment further' more would increase. Tt is stated that business men in Australia are giving far closer attention to their affairs than was the case IS months ago. The prevailing conditions in Australia and N.Z. demand an investigation into the opera-

tions of the Arbitration . Court which should be brought back to the original, position.

Sir Arthur Duekliam, leader olf the British Economic Mission to Australia, in a recent address to manufacturers in England, condemned compulsory arbitration for under it settling trade disputes took on a legal aspect, and union secretaries and others have developed into tricky litigants. Sir Arthur told his audience: “A judge sat with no knowledge of industry with assessors to decide the case, and all the proceedings were very formal and official. If business were doing well it wais probably that Labour would gain some of its points and, in turn, the employer would apply to the Tariff Board for an increase in tariff; this in turn led to an increase in the .cost of living, and so the vicious circle went on.”