VAST RESOURCES

Otago Daily Times, Issue 24403, 14 September 1940, Page 12

VAST RESOURCES

EMPIRE'S WAR EFFORT SIGNIFICANT COMPARISONS WHERE ITALY STANDS 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 exceeds that 'nade on ihe «ide by Italy with a population of 44 000.000. This striking fact was brought out by Mr Colin Clark, wellknown Australian economist, in a recent world broadcast, the text of which has been released in New Zealand by the Australian Trade Commissioner.

"The fortunes of war," Mi Clark said. " 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. "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 spite of anticipated depletion of man-power by enlistment. These figures are well above the previous record of £768,000,000 in .1929, at a time when much higher prices were "being received for Australian exports than now; .

"War expenditure to be 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 the training- of Australian troops for service overseas. '

Rapid Expansion

" 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 higher 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, ut its national income to defence purposes, and delay in building up a war programme was inevitable. Obstructions, however, are being rapidly overcome, and even 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 be made. t . , "It is of some interest to note that current expenditure on war and defence amounts to .7.3 per cent, of the national 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 of 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 cbuntry 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, the 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 rruich on their productivity as on the excess of their productivity over current requirements. The process of reducing civilian requirements has begun, though later than in Great Britain and will be progressively continued. "It is clear that in a poor country such as Italy civilian requirements can only be reduced in a limited degree, and if attempts are made to carry this reduction far, standards of health ana 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.

Probable Decline in Italy

"The maximum economic contribution which Italy can make, therefore, is only £2O per breadwinner. Australia and Canada are already contributing £45 to £SO per breadwinner as Britain is at the present time, Thus Australia. Canada, and New Zealand, with a combined population of only 18,500,000. are already making materia! contribution to war effort greater than Italy's—and. moreover, one which wih increase rapidly while Italy's will probably decline. "Australia is shipping goods at U'.u oresent time at the rate of 2,500,000 tons of wheat and 500,000 tons of sugar per year These are enough to provide continuous bread rations for half the British population and continuous peace-time sugar consumption for aquarter 1 of the British population; on the basis of war-time rations we are supplying more like half of Britain's sugar requirements.

"At present we are shipping at the rate of 600,000 tons of wool per year representing Britain's entire peacetime requirements with 30 per cent over: 300,000 tons of meat per year, or 10 per cent, of Britain's peace-time requirements: and 100,000 tons of butter per vear. or just under 20 per cent of Britain's peace-time requirements. In the case of wool. Britain now requiries as much as she did in oeace time, mainly for uniforms and for manufacture for export. In the cas« of meat and butter, as with sugar, wartime rations are below peace lime, and Australia's contribution to Britain's requirements is greater than the percentages just given."