BUOYANT FINANCES

Dominion, Volume 34, Issue 80, 28 December 1940, Page 4

BUOYANT FINANCES

Australia’s Ability To Bear War Burdens RISE IN EXPORT INCOME increased taxation and further Government. borrowing for war purposes, now faced by Austniiiacs as ait instalment of the Commonwealth Governwetit’s war finance programme, may be met by lhe people with equanimity, says a'Commonweal!li Department of Informal ion bulletin. "The liimnces, trade and industry of Australia are buoyant, with production running at a high level —higher, possibly, than at any oilier lime in Hie country’s history," adds the bulletin. "Front lhe viewpoint of a nation at war, this i.s of prime importance, as tlie question of the supply of funds for lite proseeti I ion of hostilities resolves itself in the last analysis lo the capacity of the country Io produce the essential ma lerials.

"Whether lhe money required for war and defence be raised by taxation or by interim! Itorrowiug, tlie ullimate source is tlie current income of tlie community. Jttdicbnis lisp of central bank credit may sti'mulale lite supply. "Latest statistics issued by tlie Cqinmoitwe:t 11 h Bank disclose that lite Austr:|liati banks as a wlmie liave vastly improved their liqiiidilv since Hie war began, in addiiiob to increasing tlieir c.-tsli as.-eis by £8.hull,()()(>. Hie nine trading banks in Atisti-aiia have put £22,2110.(1011 into Government securities and iuvesled £20,000.000 in Treasury bills in tlie last 12 niotilhs. "Between September, 1939, and September, 111 HI, tlie total of deposits with Hie trailing batiks increased by £31.500.(t00. lint ordinary advatn-es to the public det-reased by £12.2(1(1.0011 Grealer Export Income. "Much of I lie improvement in hanking liquidity liar conic from the rise iu export im-ome and tin- eirctilation of associated with tlie speedingup of war and defeni-i- itiilusit ics. While deposits have risen, advances have dee; eased, due iu part to repayments by primary prodm-ets and also in large measure io rest rii-lions under wartime regnla I ions on 41.-e use ol credit. "I iiler-bauk cheque clearings, a Useful index of general business activity, liave been increasing steadily in all Stales of tlie Commonwealth during tin- past. year. 'Tlie total was £47,'.iiltl,(toil iu September. 11l 111. againsl £-111,6011,1100 iu Seplemher. 1939. ■The general employment position lies improved very considerably. Latest statistics show that Hie percentage ol' trade union meinbers unemployed in Australia fell from 10.5 in May of this year to 7.1 iu August, compared with 10.2 in August. Hliil). "As lo lhe overseas trade of the ColiiniiHiweailli. th-e (.'oiiimonweallh Bank estimates, on tin- assumption llial there will in- no furllier intense licaiioii of shipping difiiciillics, th.H tlie value of exports, including gold predllced. in 1910-11, will be about Hie same as iu l!l3t)--10, when lhe ligule was a pproxi ma l el.v £ I6S.Iino.(HUI (Australian i iirrciiey t. This resull is expeeled in spile of lower proditeiloit of wool anil wlie.il. The balance of Hade should be improved by 11.-e furllier rest rielions on iniporiaiion of goods from nun slerling eounlries which came inlo operation as front (teloln-r 1. "A broad view, t herefore. engenders i-otilidcnce that tlie A its! ra linn community will not only Ik- able to bear whatever ini-ri-ased taxation may be Hi-cess.-ir.v, but will have a substantial fund of new savings front which to i-inil ribute to war loan.-. a,s anil when they .ire lloaleil."