RISE IN PRICES

Wairarapa Times-Age, 5 July 1941, Page 3

RISE IN PRICES

RISKED BY THE FEDERAL GOVERNMENT IN TAKING LARGER BANK ADVANCES. TREASURER’S OUTLINE OF POLICY. (By Telegraph—Press Association—Copyright) CANBERRA, July 4. The Government will risk some upward pressure of prices by taking larger advances from the Commonwealth Bank. The Federal Treasurer (Mr Fadden) made this announcement in the House of Representatives when he gave a preliminary review of the Commonwealth finances for 1940/41. Allowing for subscriptions to loans and war savings, and the yield from existing taxation, Mr Fadden said, there would be a gap of about £60,000,000 to be financed. This made no provision for expenditure overseas. “Under war conditions, during the last two years, we have made a considerable expansion of credit, he added. “If the needs of the country require more spending power than is provided by other factors, then the Government will expect the Commonwealth Bank to take direct means to make up the deficiency. The need for increased spending power in the community above what is provided by natural processes is a measure of the extent to which the Commonwealth Bank can provide directly for the financial needs of the Government. Because of the urgent needs of war finance, we are and shall be pushing this amount upwards to the limit of safety —that is to say, we shall risk some upward pressure of prices rather than run any risk of not having in the community _ enough spending power, whether public or private. to use all our resources to the very fullest degree possible.”