EMPIRE EFFORT

Wairarapa Times-Age, 24 September 1940, Page 8

EMPIRE EFFORT

MARSHALLING ECONOMIC RESOURCES AUSTRALIA’S PROMINENT PART. NATIONAL INCOME INCREASED. ie Though the three Dominions of Ausa tralia, New Zealand and Canada have a combined population of only 20,000,000 their economic and material con■a tribution to the war effort already exs ceeds that made on the other side by n Italy with a population of 44,000,000. a This striking fact is brought out by Mr Colin Clark, well-known Austra--11 lian economist. in a recent world n’ broadcast —now released in New Zea--11 land through the Australian Trade Commissioner. “The fortunes of war,” said Mr Clark, “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 e can produce. Equally important, howd ever, is the amount required for cone sumption for purposes other than war. e The more it can produce, and the less it can consume, the greater will be a , r country's war effort. "The amount which a country can s produce is generally known as its national income. Investigations of nation's al income have been my special sphere of work for a number of years. ’ “National income produce in Austra- , lia in the year ended June, 1940, was a computed at £866 millions Australian; j and for the year ended June, 1941, it is provisionally estimated at £9OO millions, in spite of anticipated .depletion of man-power by enlistment. These figures are well above the prej vious record of £768 millions in 1929, j at a time when much higher prices were being received for Australian ex- ” ports than now.| “War expenditure to be incurred actually in Australia during 1940-41 is 3 estimated at £l6O millions, or 18 per 3 cent of the national income. This will j represent expenditure on the building 5 up of a large army, air force and navy in Australia, and on the training of Australian troops for service overseas. “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 one per cent of its national income to defence purposes, and delay in building up a war programme was inevitable. | “Obstructions, however, are being I 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. I “It is of some interest to note that I current expenditure on war and de- I fence amounts to 7.3 per cent of the I national income in U.S.A., about 15 per I cent in Russia, and 28 per cent in I Japan. j “In comparing national income be- | tween one country and another, it will I not suffice simply to convert currencies I at present-day exchange rates, because I

the actual purchasing power of money I in different countries may vary widely. I It is, however, possible to compare nat- I ional incomes in terms of ’sterling pur- 8 chasing power.’ That is to say, we can ft state the actual quantity of goods pro- | duced in each country in terms of their ? sterling value. On this basis we obtain I a figure of average production per I breadwinner of £3OO in Britain and | Canada, and £2BO in Australia. For | Germany the figure is only £l9l, and I for Italy £92. For Japan and Russia .9 also, it is interesting to note, the figures | are £97 and £B7 respectively. | “The capacity of the Dominions to H contribute to the war effort is there- 1 fore much greater than would appear B from their population alone. Strictly E speaking, it depends not so much on E their productivity as on the excess of H their productivity over current re- H quirements. The process of reducing I civilian requirements has begun, B though later than in Great Britain, and B will be progressively continued. j “It is clear that in a poor country! such as Italy civilian requirements can only be reduced in a limited degree, I and if attempts are made to carry this i reduction far, standards of health and even of civilised living arc endangered. In 1939-40 the Italian government spent 40 per cent of the whole national income, half on civil and half on mill- | tary requirements, and indeed it is | doubtful if Italy can spend at any | greater rate now that she has entered | the war. | “The maximum economic contribu- H tion which Italy can make, therefore, B is only £2O per breadwinner. Austra- R lia and Canada are already contributing £45 to £5O per breadwinner, as Britain is at the present time. Thus Australia, Canada and New Zealand, with a combined population of only 18| millions, are already making material contribution to war effort, greater than Italy's—and. moreover, one which will increase rapidly while Italy’s will erobably decline.

"Australia is shipping goods at the S present time at the rate of 21 million H tons of wheat and half a million of R sugar per year. These are enough to B provide continuous bread rations for | half the British population and con- E tinuous peace time sugar consumption I for a quarter of the British population; I on the basis of wartime rations we I are supplying more like half of Britain’s sugar requirements. “At present we are shipping at the rate of GGO.OOO tons of wool per year, representing Britain's entire peace time 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 year, or just under 20 per cent of Britain’s peace time requirements. In the case of wool. Britain now requires as much as she did in peace time, mainly for uniforms and for manufac- j lure for export. In the case of meat and butter, as with sugar, war time rations are below peace time, and Australia's contribution to Britain's requirements is greater than ttie percentages just given." i