Prices in Australia

Dominion, Volume 26, Issue 124, 18 February 1933, Page 13

Prices in Australia

Sir, —Bon. R. Masters has quoted the ; Australian cost-of-living figures in support of the New Zealand Government’s policy of high exchange. If 'those figures are to have their full-value, however, reference should be made also to the fact that high exchange in Australia has been accompanied throughout by high tariffs. In November 1929, Australia placed a duty amounting to almost an embargo upon imports of lines which could be manufactured in Australia itself. As soon as this highly protective policy was recognised as a stable one, Australian factories began to receive enormously increased orders; and their larger output enabled Australian manufacturers to reduce prices. Moreover, numerous overseas firms immediately realised that, since thev could no longer export their goods to Australia, it would pay them to establish branch factories in Australia itself. Figures relative to the clothing industry show how the increase of protective tariff led not to any increase in prices, but, on the contrary, to an accelerated decrease. From 1927 to 1932 inclusive the price index figures were: —1017, 995, 980, 947, 869 and 784. This is but one case of hundreds which demonstrate the fallacy of the popular idea that an increase in protective tariff always leads to an increase in price of the Dominion-made article. —I am, etc., L _ N.Z. MANUFACTURER. Wellington, February 16.