WAR’S HIGH COST

Wairarapa Times-Age, 10 February 1941, Page 9

WAR’S HIGH COST

AUSTRALIA’S' PROBLEM The scale of yvar expenditure to yvhich Australia is committed in. the current financial year is without parallel in the nation’s history, says a Commonyvealth Department of Information bulletin. “But also is the peril yvith yvhich the country is faced.” it adds. “Expenditure on yvar and defence for 1940-41 has been set out by the Treasurer <Mr. Fadden) in his Budget speech at a minimum of £ 186,000,000—£143,000,000 in Australia and £43,000.000 overseas. The total is three times as much as was spent in 1939-40. and approaches double the estimate made in May last, just before the collapse of France. "Since that item the tempo of Australias war effort, in keeping yvith that in Great Britain and other parts of the Empire, has been enormously accelerated. and the yvar expenditure of the Commonyvealth is noyv running al about £15.000.000 a month "As the Federal Treasurer has said. “We have noyv for the first time to face up to the full magnitude of our programme of fighting forces, equipment and munitions." "The financial obligation surely will be met. There is no question al all about that. The main problem of the Government is that of distributing the burden over the yvhole community as equitably as possible, yvhile at the same time preserving the economic process of the country in full productive power. To achieve this the Government has endeavoured to ensure maintenance of a proper balance between taxation and interna! borrowing. After all. as Mr. Fadden emphasised in his Budget speech, expenditure by the Government on -the year or any tiling else in /Australia must come in some yvay from the pockets of the people. It may come by loans yvhere a, man willingly gives up spending power in the present in return for spending poyver in the future, or it may come from a system of taxation designed to take from each man according to his ability to pay. It may also come by expansion of credit, which, if not carefully controlled, will take spending poyver from everyone in the community by ■ yvay of rising costs. This, in effect, is a forced levy at a flat rate on all in-1 comes, and bears most heavily on those | least able to pay. In the circumstances, the Treasurer has stated unequivocally, that the Government’s financial policy, though liberal, will stop short at reckless measures which yvould have such inequitable results ond could only end in financial and economic collapse. "There can be no doubt about Australia's capacity to meet expenditure on the scale provided for in the Budget About 20 per cent of our national resources is now being devoted to wai needs—a proportion that is small compared With the 55 per cent <>f then national incomes being given up for the same purpose by the people of Great Britain. After allowing for taxation incroases then* will b<- a gap between e-.tim-| uteri revenue rmd expenditure for th, coming financial your of £ 50,000. Wk) on t war account which must be bridged I by internal borrotving. and in addition! £ :iO.OOO,(MH) of loan money wdl be ’ nr-eded for public works of ’.tie Lorn ! miiHWealth and Stilles anti fur other ! pnri.oses | (’li-urly tfie extent of t;,x;d;.,n I futuri Will dr-pend largely upon vuhm- . tars response of the public to the Go- j n-.-m loan flotations F.t this if j for no ..th'T reusoH. tlie ooo.itoo tv.d ;md works (Freedom' loan D now <i|.en und c. exp<-cti-<f to L><-well .upp-n t I • >l Ly large and small nmo,..r< i The ‘... rm: ,afi- the .um<- for the pre-! vi.-iiK loan issued m May last, namely ( per rent in'.-r<- '-i live or :t‘ ;><-r mm f.-r IC years, the Treasure: h.avmg th<- ~f redeem,ire