NO GLOOM.

Press, Volume LXVI, Issue 20024, 4 September 1930, Page 12

NO GLOOM.

AUSTRALIAN FINANCES. LIVING DOWX THE PAST. CreoM oira :»wjj coaaESPoxmcxi.) SYDNEY", August 28. Xow that the surprisingly frank statement made to the Premiers and Treasurers by the English adviser, Sir Otto Niemeyer, has been made the public knows the worst, and knows, moreover, that the position facing Australia is a very serious one. It is realised, too, that Sir Otto did not come here as a bailiff, as the Labour extremists would have people believe, but as the honoured guest of the Commonwealth, to advise—to help Australia.out of an extremely difficult position. His statement contained no demands, no instructions—but put the position clearly, in a manner that had been shirked by the politicians on all sides. The result of the conference in Melbourne last week has been the setting up of what will virtually be an Economic Council for Australia which will tackle the problems of the Commonwealth in a nonparty spirit—the only spirit by which success can be achieved.

It is really remarkable that a full realisation of the position has not been accompanied by gloom and long faces. Instead there is not lacking evidence of a resolve to make the sacrifices that will be necessary. Of course there are exceptions. The leading Labour unionists say that they are not going to give away a single thing, but hard thinking people know that they will riot be able to sustain that. With some it is a firm resolve to maintain awards at all costs, and if that sort of thing 5s attempted tbe cost is going to be extremely heavy—to the unionists concerned. The official Labour representatives have already withdrawn from the Unemployment Relief Council in South Wales, the body that i 8 providing thousands of people with work from the proceeds of the wages tax of 3d in the £. Labour women also withdrew from the Women's Advisory Council, and in each case the resignations were due to the refusal of the Government to agree to the payment of award rates for relief work.

Government Expenditure. The aggregate of expenditure by the States and the Commonwealth last'year, apart from loan expenditure, exceeded £185,000,000. At last week's conference of the Premiers and the Treasurers, the representatives of New South Wales, who held a. Very strong hand, urged common action in the direction of effecting a reduction in this expenditure, by an amount which represented approximately the same ratio aB that by which the National dividend has fallen. Excluding interest, a reduction of which can. only. }>e effected on. new issues and conversions, the adoption of his plan would Involve a decrease in expenditure by the States and the Commonwealth, of; approximately £40,000,000. If the principle underlying this method is accepted, diligent enquiry into every form of public expenditure, including the cost of Federal and State services, pensions, .and other forms of payments, will need to be. made without delay. In fact, the- decisions of the Federal and State Governments to balance their Budgets for this year, and to watch developments of the Budget position . from month to nicintli will involve a searching enquiry on the part of each Government into every avenue of expenditure with a view to effecting a very substantial reduction in costs. Mainly, the function of the new Standing Committee will be to advise upon a common * plan to achieve this objective. There are four members of the Committee, and two of them are Labour men and two of them are Nationalists. They will find it hard to arrive at that common policy, surely, but perhaps that new non-Party spirit will become a reality instead of a dream-—a vision- Certainly every Government must reckon upon- an inevitable and substantial' deeline in public revenue. There appears ■to be a common agreement that the drop in the national dividend will not be less tjian 20 per cent., and unless this rates of taxation, both direct and indirect, are 'greatly increased, it is ■stated on the best authority that the Governments cannot possibly 1 hope to secure, anything like the same amount of revenue as they collected last year. Australians, are already . so heavily taxed that further taxes to make up the trhole of the deficiency are out of the question. , The Sales- Tax.

Hitherto, for the most- part, the Commonwealth' has depended upon indirect taxation for its revenue. The sales tax, which has just, been imposed, represents a new departure in taxation as far as this fart of/the world is concerned, and there ■ is considerable speculation whether the yield will be as great as hat been estimated. It seems certain that the actual amount from Customs , revenue. .this year will bp about £8,000,000 less than the estimate. What

is sow disclosed is that the framers of / the Budget estimates (so far as the Customs revenue is concerned) entirely -overlooked the incidence of the exchange pool arrangements, under the terms of which £36,000,000 per annum will be taken out of the exports and earmarked for the requirements of .the Government in London. This will rednee the amount'available for imports, and ia a circumstance that is also bouna to affect tho Estimates. as far as the sales tax is concerned. It seems, ihere- , fore, ■ that there will not only be a falling-off in the estimates as far as Customs, are concerned, but also from the sales tax. Turning to public, utilities,, there is no escape; from acceptance on the part of *ll the. Governments of the, obligation to . reduce costs, and the question arisen: Where are they going to turn for economies? All the States are rendering services of a , common character, and these will be explored with the object of discovering a common policy for effecting savings. The costs' of education,, for example, vary in the different States. In New South Wales the eost of education runs to nearly 25 per cent. , of the total cost of government, ajjart from Government utilities. There is. general, agreement that the costa of education throughout the Commonwealth must be lowered,, and here is a field for a common policy. . The same may be said with regard to such servieepas hospitals/ charities, the police, and the railways. Ministers in several States are already surveying these fields. More Cheerful Tone. The Acting-Prime Minister (Mr Fenton) took office the day the Melbourne agreement was reached,, and the following day he said he was extremely gratified at'the favourable opinion it had created. He was particularly gratified by the reassurances he had received fmm' business men. There was ho donbt that there was a definitely more cheerful totfe.' On the question of trade recovery Mr Fenton.is having prepared a considered statement from the Department of Customs and the Statistician's Branch which', he believes, will prove that a severe diminution of im* A f #r r* » the first weeks of the

fiscal year has been accompanied by a big improvement in internal trade. Australia's exclusion from the overSeas borrowing market for an indefinite period is going to be a big drain on the local money market. The most serious aspect of this is that less money will be available for the expansion of industry. In truth it can be said that in Australia complications pile on complications. AUSTRALIA'S POSITION. A SIMILE IN PLAIN LANGUAGE. Mr Telford Simpson uses a simile to explain the upshot of Sir Otto Nieniever's analysis of the financial crisis in Australia (states a Sydney paper): "Let us take the case of a farmer »vho has a daughter and five sons, with a farm divided into six portions; each child has one portion, the farmer exercising supervisory control over each child and its portion. ''The farm produces wheat, wool, mutton, rabbits, bacon, and eggs, the proceeds of any item being claimed by tho child that produces it. "Each child has borrowed something on the Sfcurity of his particular portion of the farm; one has put it into productive improvement by the sowing of subterranean clover; another built an extra strong fence; the third spent his in riotous living; the fourth bought some sheep as a speculation; the tiftli spent his in irrigation works, and the daughter bought some jewellery.

I'Tlie produce was sold amongst the neighbours, except some wheat and wool, sent to the nearest town—a read.v market.

"Expenses of the menage prew from L'looo per annum, which satisfied the normal requirements, to £2OOO per annum.

"Father's drawings from the children had to be increased, owing to his necessities becoming greater. Added to this it was found that the neighbours now only wanted a small proportion of the produce, compared with what they had previously taken, some lonns made to the respective children fell due, and others were about to fall duo.

It was founcj the family's income from the produce wa« only sufficient to meet the £2OOO a year required for llie upkeep of the establishment, and portion of the interest owing by the children on their loans. But there was not sufficient to pay the whole of or any of the principal. 'I his made it perfectly obvious to t'ach member of the family that there was only ono course. "First, the extravagance in the heme had to stop, and living expeuses to be cut down to a minimum, to ~VV e P» rcha ses from £2OOO to £7OO Drawings of each of the children irom their particular portion of the '" rm "? d be curtailed, so that each son reducod the numbor of cigarettes, gave up horse-racing and unnecessary amusements, made his old clothes do duce' ° n Wbat thS fam WOuld pro " "3 he daughter, too, must give ud her purchases of jewellery. They have ar^, er on their respective holdings; make a longer day of it and give up taking holidays. _ "Eventually the family's revenue will overtake and at last exceed its expenditure. that >s to say—the price received for products will exceed the prices paid to grocers, tailors, dress,other3 for goods supplied. Thw surplus is then available gradually, to. pay. off the liabilities which Joe father and each, of the children Imve : incurred, and ultimatelv the whole of the several debts are paid off. and they are all on an oven keel ogam. '

NEW ZEALAND-MADE GOODS. WELLINGTON EXHIBITION. (parsa association TttrasAJi i . WELLINGTON, September 3. In . the course of a message 'supporting, "Made in New Zealand" Week, commencing at Wellington on September 151b, the Minister for Industries and' Commerce, after referring to the success which has attended «imilnr efforts in other centres, says:—• "Behind the whole movement is a desire, on the part of those who are actively co-operating to stimulate the demand for New Zealand-made goods, so - that • additional • work may 'be found for-New Zealand workers. If those industries whose products will be exhibited receive a greater measure of Bupport from the purchasing public, it will enable them to develop along progressive lines, resulting in an increased output, an increased number of employees, and lower prices to the consumer. I commend the present efforts to the thoughtful consideration of ,the community, and appeal to them to buy New Zealand-made goods wherever possible There is no, question that if this policy is carried out will benefit not only the industries directly concerned, but will also relieve to an appreciable extent the serious problem of unemployment."

W. R. COOKE AND SON, LTD. [THE PBESB Special Service.] AUCKLAND, September 3. W.. R. Cooke and Sort, Ltd., tea room proprietors, showed . increased profits for the year, ended April 30th. For the' previous term the erection of new premises in Queen Btreet had a dislocating effect upon business, and after disclosing as net profits £1293, the directors decided not to recommend the payment of a dividend. Profits for the latest period total £2276, and a dividend of 5 per cent, was paid. The distribution was liberal, involving a reduction of £798 in reserves to £4605 (including £2798 depreciation reserve).

FINANCE CORPORATION, LTD.

The fifth annual general meeting of the Mercantile Finance Corporation s Ltd., was held yesterday, Mr. Arnaud McKellar, the chairman, presiding. The report and balance-sheet were adopted. Messrs B. Moore and A. F. Carey were re-elected 'directors, and Messrs Hoare and Kingscott were reappointed the auditors. The proposals governing the payment of dividends aa provided for in the directors' : report, were approved. ALEXANDER MINES, LTD. ' (special to raa mums.) JtEEFTON, September 3. At the Alexander mines last month the battery crushed 347 tons of quarts for a yield of 306oz7dwts of melted gold, while 174 tons of sands were cyanided for 87oz 4dwt of bullion. The -total estimated value of the sold woo ia £1485.