The Press Monday, September 8, 1930. Cutting Costs.

Press, Volume LXVI, Issue 20027, 8 September 1930, Page 10

The Press Monday, September 8, 1930. Cutting Costs.

After rumours of dissension which were described, on Ministerial authority, as " greatly exaggerated," the Federal Cabinet came to a complete agreement on Saturday afternoon " on "the supreme necessity of balancing "the Budget." It is to be hoped that it is also true that the programme in view is one " behind which the whole "community can rally." Australia cannot afford to give the world ground even for suspicion of its firmness and unity in taking the straight, hard road. Evidence of the uneasy, close watch which is being kept on all signs of the Commonwealth's intentions appears in many ways. It appeared, for example, in the cabled comment of the Financial News, on Saturday, that Australian securities dropped one or two points in sensitive response to reports suggesting, it is to be inferred, that relief worth £5,000,000 was not appreciable, or not appreciated; and it appeared also in the comment of the City Editor of The Times, who, according to a message on Friday, referred to the depressing influence of "reports indi- " eating a disagreement in Common- " wealth Ministerial circles regarding " the balancing of the Budget, and the " reluctance of some elements to accept " the necessary sacrifices." It would of course be too much to expect that members of the Cabinet should be of one mind about every detail of a policy of retrenchment and reconstruction. A necessary measure may be pressed to this or to that extent. But the danger is in giving the impression that the Cabinet ia divided on questions, not of degree and of method, but of principle and necessity; and if such an impression were in • fact justified, the outlook would be gloomy. For it is quite certain that the rapacious Labour section in Australia, which has helped to get the country into its predicament and is urging every sort of ridiculous and ruinous alternative to the honest man's way out, will be emboldened and strengthened by every indication of weakness in State or Federal Government. As for the decisions taken, and the programme of legislation to be put before an emergency session of the Federal Parliament in October, it is difficult to say much about them in their bare outline form, although two Or three items obviously contain the seeds of great mischief. It is a good sign, however, that the Cabinet is ready to start reducing the costs of government, a reduction which it is quite reasonable to say should come first, andi ready even to reconsider the measure of social service that the country can afford. But it will be necessary to do very much more than bring down administrative cos's and lop a little off the social services, while trying \a few new expedients of taxation, if the Acting-Prime Minister's promise is to be kept and the Melbourne Conference agreement carried out, in the spirit as well as the letter. Australia's true object is not to "balance the "Budget," once, or twice, but to reconstruct her economy so that the balancing of the Budget is the regular and natural result of sound productive effort, and pot a success due to severe strain and special contrivance. This is the meaning of the Economic Bulletin, on Overseas Trade, issued at the end of the week by the Canterbury Chamber of Commerce. It is addressed to New Zealand conditions and based on New Zealand facts and figures; but the truth of its single lesson—which is well wrapped up in verbal flannel —is equally the truth about Australia. " The road to economic re- " covery and future prosperity," it lays, "is clearly dependent upon the! u provision of those conditions that " make possible an increase in per " capita production adequate to coun- ;" terbalanee falling prices." , And again: " Trade recovery .. . depends " partly on the return of prosperity in "our overseas markets, and partly on " the improvements that we are able "to make in the organisation of our " own productive activities and in the " reduction of overhead expenses." Third, "we must be prepared to adjust "our economic conditions to a lower " level of world prices." New Zealand is fortunate in being better fitted to make this effort than Australia, and a much smaller effort will do; but it must be made. It is not enough to wait for the turn of the tide to spare us the necessity, although the tide probably will turn. Nobody knows how soon, and nobody knows how plentifully it flows. There is no escape, therefore, from the necessity of making tho effort; and the most lamentable thing in the Dominion's pilitic& to-day is that It has a Government which has failed to make the effort itself,; and has made it harder for everybody else.