“Satisfactory” Outlook In Australia

Press, Volume CII, Issue 30264, 17 October 1963, Page 16

“Satisfactory” Outlook In Australia

"On the whole, the Budget has many redeeming features, which do much to sustain the pattern of steady recovery and growth with which the current financial year was ushered in,” says the October “Quarterly Survey” of the Australia and New Zealand Bank, Ltd., in a reference to Australian conditions. The bank says that "a strongly expansionary Budget in such conditions would have involved considerable risk of inflationary pressure developing. “ Examination of the relevant economic indicators emphasises that the current economic situation is reasonably satisfactory and the outlook tor the future encouraging,” says the bank. “Industrial production as a whole has recovered to a level above the boom year of 1960, as measured by the A.N.Z. Bank index of Australian factory production. “Building activity in the

commercial and industrial spheres is maintaining the relatively high level it achieved in 1962-63. Motor Retailing

“Motor vehicle registrations have attained record levels.

“Retail sales (excluding motor vehicles) in the June quarter this year were nearly £5O million higher than in the corresponding quarter of 1960, which represents the previous peak level "Rural production is buoyant and the prospects tor prices during the current season appear reasonably satisfactory. In view of the continued high Level of capital inflow, the outlook for the balance of payments in the current financial year is most healthy and, again, there should be no problems on this score.

“Costs and wages, which have been relatively stable far the past two years are once more showing upward tendencies.

“Aggregate eammgs of the workforce moved upward 6 per cent during 1962-63, caused as to 3 per cent by an increased workforce, and as to 3 per cent by higher average earnings. Pressure on Wages “These higher average earnings would be due, in the main, to over-award payments and increased overtime, as wage rates were relatively stable during the period. Upward pressure on

wages therefore, is again becoming evident. “Spending power, and potential borrowing power, in the community stand at a high level. Overdraft limits in the banking system are substantial, and savings bank deposits are at record levels, now equalling trading bank deposits." Referring to the over-sub-scription to the July Government loan, the bank points out that this “was an indication that general public spending has not yet been fully restored and that private capital investment is still tending to lag. The Budget may well contain the necessary stimulus to get those two important cogs in the economic machine back into top gear, which could have a most Important influence on the pace of economic activity.”