HUGE COST OF WAR

Auckland Star, Volume LXXVI, Issue 84, 10 April 1945, Page 3

HUGE COST OF WAR

AUSTRALIA'S GREAT EFFORT TAXES, LOANS, BANK CREDIT Special Australian Correspondent. Rec. 11 a.m. SYDNEY, April 9. In terms of money, Australia's war effort to date can be set down in round figures at £2,150,000,000. This estimate is made by the financial editor of the Sydney Sun, who lists the main sources of the Commonwealth's war expenditure moneys as: Revenue (mainly taxation), £700,000,000: publicly subscribed loans, £1,030.000,000; Central Bank credit expansion, £400,000,000. The main factor enabling Australia's population of little more than 7,000,000 to find so much money for the war has been the great wartime rise in the national income, now estimated at £1,300,000,000 a year, compared with £800,000,000 in 1939. That year the Government collected in taxation £74,000,000. The estimate for 1944-45 is £320,000,000, representing an increase of 330 per cent on the pre-war total. Credit Kept Within Bounds "It is generally agreed that credit expansion in Australia has been kept within reasonable bounds," says the Sun writer. "The official estimate of the increase in retail prices in Australia since 1939 is 22.8 per cent against 28.8 per cent in the United Kingdom and 25.4 per cent in the United States. "The real cost of living in Australia, however, is unofficially admitted to have risen much more than 22.8 per cent. The real rise in the cost of living is probably between 40 and 50 per cent. "On the whole, Australia may pride itself on having put up a very creditable performance in the financing of her war effort. The amount no far subscribed, of more than £1,000,000.000 for war loans, war savings certificates and the like, works out at about £150 for each man, woman and child in the community. But the great bulk of war loans (60 per cent) has been subscribed by large financial institutions and companies." A warning that the danger of inflation I is not yet past, that Australia must raise : many more war loans, and that responsibility for avoiding inflation rests largely with the small investor, the Sun's financial editor concludes: "The average man in the street, whose income has risen during the war, can hardly be said to be pulling his weight. His apathy towards war loans must temper the satisfaction felt in regard to our over-all success in financing the war."