MORE WORK AND A DIET

Evening Post, Volume CX, Issue 48, 25 August 1930, Page 8

MORE WORK AND A DIET

Australia, suffering from financial

malaise, sent for a financial physician. He has diagnosed the trouble with unquestionable frankness, and his frankness is plainly a part of ihe treatment.' In the opening paragraph of his statement Sir Otto Niemeyer presents what may be considered the root cause of the difficulty—"the natural optimism of Australians, among whom the general belief prevails that there is an unlimited market abroad for Australian goods, and that something will turn up." Throughout the statement he submits facts which must shatter that false optimism, and his final sentence (a sentence of hard labour) is the climax: "Australia must resassure the world as to the direction in which she is going financially, and no one else can do that for her." In the whole statement there is not one suggestion of financial wizardry—no hint of a miraculous cure. It is simply hard, financial .common-sense. There is no reference in the cabled report (which appears to be fairly comprehensive) concerning a central reserve bank. Sir Otto does not undertake to reform the banking system, nor does he even suggest that it is faulty. He indicts the whole nation. So far from helping to "turn up something" for the optimistic Australians, he says plainly that they must dig for themselves. They sent for him, expecting a prescription of some patent tonic and at least a sympathetic bedside manner. He has come and said with brusque truth: ''You are eating too much, drinking too much, sleeping too much, and taking too little exercise. Get up and work and go on a diet."

The statement must be the more unpleasant because it is not,mere generalisation. At essential points it is supported by incontrovertible facts. Australia is off Budget equilibmim, says Sir Otto, and refers to successive State and Federal deficits. Even if Budgets are balanced this year, there must be ways and means deficits in several during early months owing to the seasonal nature of the tax receipts. In other words, Australia, for financial convenience, should have a surplus to carry forward, and should not work on overdraft. Australia is off exchange equilibrium, Sir Otto continues, and shows how the trade balance is strongly unfavourable. He adds that drastic tariff increases, prohibitions, and rigid rationing are temporary expedients. Nor can a permanent remedy be expected from higher values for staple exports. There is more likelihood of a decline. In unmistakable terms Sir Otto then declares what must be faced. Australia must eilher lower her standard of living or do more to justify it. Production increases have not kept pace with the rest of the world, and wholesale prices have been maintained at an artificially high level. Australia may no longer rely upon "a series of accidents" to maintain a standard of costs which the rest of the world long since found impossible. Now it remains to be seen whether Australia will adopt the measures advised or will try another patent medicine.