The Dominion THURSDAY, AUGUST 4, 1932. THE OUTLOOK IN AUSTRALIA

Dominion, Volume 25, Issue 265, 4 August 1932, Page 8

The Dominion THURSDAY, AUGUST 4, 1932. THE OUTLOOK IN AUSTRALIA

Although it has been evident from various indications tM conditions in Australia are showing an upward tendency, our kinsm across the Tasman have a long and difficult row to hoe before econom. equilibrium Can be said to have-been re-established. q At the Premiers’ Conference held recently the Federal PrimMinister, Mr. Lyons, reported that the Premiers Plan for he yea. '1931-32 had not been realised. The. Statesi alone had undertakent reduce their estimated aggregate deficit of £20,680,000 to £11,5 0,000 Actually, their aggregate was £17,610,000. The principal defau t , • course, was the Lang Government of New S° u th Wales, whose de - in excess of the Premiers’ Plan was £7,343,347. behind her commitment to the extent of £1,315,000, ,T a^ a " ia short by £90,000. Altogether the net excess over the planned deficit was stage of the financ j a i cr i s i s n o doubt has been passed, but Australians have yet to acquire and practise the virtue ot str c. economy. The increase of public expenditure per head, apart from loans, in the years between 1914 and 1930 was amazing. New South Wales jumped from £9/13/3 to £2l/1/1, while West Austria showed an increase of from £l6/13/1 to £24/12/9. The other ae comparatively similar confessions to make of a rising scale o extravagant spending. All have in this brief period more than doubled their Wh P en n< the Premiers met in Sydney the three main questions to be dealt with were (1), the further revision of budget expenditures, (2), the conversion of “dole” expenditure to reproductive relief works and (3), the revival of industry by the joint operation of reducing the Customs tariff, and increasing the exchange rate with sterling. lh Conference had previously been informed by the Commonwealt Bank Board that the limit of accommodation which could be provided to meet the deficits this year was £7,000,000, leaving nothing for loan works' Government out of the way, there were better prospects for making satisfactory settlements on these difficult questions. The Sydney Conference, compared with those previously held, was considered to have been a marked success. The States contended at the outset that their deficits, on the lowest possible estimates, could not be reduced below £10,000,000 this year. It says something for the spirit which prevailed, and the moral courage of the Bank Board in sticking to its guns, that they agreed finally to reduce this by 10 per cent. The Commonwealth. Bank has accordingly agreed to provide £6,000,000 for loan works in addition to other accommodation. Last year the amount asked for was £10,000,000. The reduction shows that the Australian Governments are really putting their shoulders to the wheel. .

The unemployment question was settled in an interesting way. The Conference decided.to make it a Commonwealth question, and to capitalise relief taxation to the ultimate extent of £15,000,000, and plan for reproductive works and practical assistance to industry, thus eliminating the “dole.” The unemployment question will therefore be taken out of State politics; and the funds required raised by a suggested internal loan.

Questions relating to tariff revision and the exchange did not reach finality. There were divergent views. The Federal Government’s acceptance of the Economic Committee’s recommendations that the gap between costs and prices of goods should be reduced by the dual operation of reducing costs and raising the exchange rate carried considerable weight. The Conference decisions were largely confidential, and have yet to be endorsed by the State Parliaments. Broadly speaking, however, the evidence points to the fact that the Australian Governments are making a real effort to cut expenditures and reach budget equilibrium by successive stages. Borrowing cannot be avoided, but it is being progressively reduced, while economies are to be Courageously faced. Victoria, for example, has undertaken to cut expenditure by a million this year. It is a hopeful sign that a people characteristically prodigal of expenditure and disinclined to face the prospect of the proverbial rainy day are now uniting in an effort to restore financial equilibrium by. work and self-denial.