AUSTRALIA'S EXAMPLE

Rotorua Morning Post, Volume 2, Issue 549, 5 June 1933, Page 4

AUSTRALIA'S EXAMPLE

Australia, that spendthrift country whose terrible financial plight sent a wave of Pharisaicai righteousness sweeping through . New Zealand three years ago, continues to show us the way back. Eleven million pounds is but a drop in the bucket of State and Commonwealth overseas indebtedness ; but conversion of 6^- per cent. securities to a rate of £3 14s 5d, even allowing for the short currency, will be a wonderful indication of the British investor's faith in Aus-

tralia's future. The venture is only by way of a feeler, but Mr. Bruce is talking already of a major conversion after the international situation has stabilised. It is.reported from Sydney that both New Zealand and South Africa are anxious to operate on the London market ; but Australia is in first. Is it too much to hope that our Government will not wait as long as usual before following? None of our public debt is costing us £6 10s in sterling — a little costs £7 10s in New1 Zealand currency — but by.far the greater part of

it carries interest at more than 3|- per cent. We have converted successfully in New Zealand; overseas interest is the one item of governmental costs that we have made no effort to bring into line with lower price-levels. The excuse is that we must not seek to evade our contracts : that it would be unfair to expect lenders to accept less. Is it fair that they should beHaking more (in commodity values) than we contracted to pay? Is it fair to expect our own taxpayers to go on paying more? To come right to the point: Can we continue as we are going? Is the alternative to reduction not default? One Australian State did default, but was kept in funds by the Commonwealth, and now shares in the benefits of conversion. New Zealand will look very foolish if, being too proud to convert, she forces herself into default.