Economy In Australia.

Press, Volume LXVI, Issue 19888, 27 March 1930, Page 10

Economy In Australia.

While the Government of New South Wales has bravely decided on a beginning in the economies necessary throughout the Commonwealth, the nature of the beginning may not win the approval of the Federal and State Labour Governments. The Bavin Government proposes retrenchments that will begin in Parliament itself, where retrenchment will have the superior force of example and where there is, in fact, a good deal of superfluous expenee to out away. A recent return put the cost of Parliamentary government in Australia at £1,271,000 annually as compared with £990,000 six years ago, the salaries and travelling and other' expenses of Ministers accounting for over £IOO,OOO of the total. Some opposition is to be expected from the pubUo servants, who are called on to work longer hours for less pay, and, in order to-avoid shortening staff, to go on leave without pay for one week in every quarter. The Government has decided on further measures, which must affect the whole earning community, and, if the community borrows some of the Government's courage, it will accept the necessity of a movement to bring' down costs. Two judges of the Federal Arbitration Court recently declared that wages must come down with profits and values, and that the Federal basic wage is falsely constructed and higher than it ought to be. Less helpfully, Mr Scullin, Federal Prime Minister, said it would be a policy of' despair to declare that the costs of production were too high to permit of the expansion of industries; but Mr Scullin knows, or should know, that artificially high costs are responsible for the stagnation in many important industries and for the ruin of the. export trade in coal and other products. Though the State and Federal Arbitration Courts may go on raising wages and shortening hours, they cannot provide an employer with markets where correspondingly high prices prevail; and it is because the markets are not there that an employer cannot pay the high wage costs. This was made very clear in the Northern coal mining dispute in New South Wales, where an important industry had come to such a pass that the coal could not be marketed except at a loss.. It does not follow that a reduction of costs should be sought solely through a reduction in wages. FiVerything depends on the value given for the wages paid. "Where*an adequate return is beifig "given, in value, for the wages paid," declared Mr Bavin "a few days ago, " there need be no reduction even in

" nominal rates. At present, in many " cases, owing to the absurd and im- " possible restrictions imposed by arbi"tration awards or by trade union " rules, under conditions of the highest " prosperity, an adequate return is not "being obtained for the wages paid. "It is this that must be altered." It is impossible to escape this view, the soundness of which even Mr Scullin will be forced in time to acknowledge. Australia's recovery from her present economic ills can be effected by a simple, although perhaps unpalatable, prescription, to work a little harder and to spend a little less. Bad seasons have had something to do with her adversity; but shorter hours, strikes, restricted production, and extravagant borrowing to cover up shortages have had much more. The Federal Government will show that experience has made it wise when it turns upon its friends and uncompromisingly denounces —and renounces —these errors.