AUSTRALIA'S TASK

Evening Post, Volume CXV, Issue 68, 22 March 1933, Page 8

AUSTRALIA'S TASK

WAY TO RECOVERY

FIGHTING THE SLUMP

EVENTS IN REVIEW

A review of the steps taken by Australia to counter the effects of the depression was given by Senator W. Massy Greene, Federal Assistant Treasurer, when speaking today at a luncheon tendered to him and the other members of the" Australian trade delegation by the New Zealand Travelmen 's League. Mr. G. YV. Clinkard, of the Department of Industries and Commerce, presided. Among those present were the Prime Minister (the Et. Hon. G. W. Forbes), the Minister of Finance (the Et. Hon. J. G. Coates), the Minister of Lands (the Hon. E: A. Kansom), the Minister of Industries and Commerce (the Hon. R. Masters), Dr. G. Craig (Comptroller of Customs), Mr. L. J. Schmitt (New Zealand Tourist and Trade Commissioner in Australia), Mr. AVarwick Gregory (president of the Australian Society), and representatives of the commercial coiumunitv.

On behalf of the Travel Men's League, Mr. Clinkard ivelcomed the Prime Minister (Mr. Forbes), remarking that this tvas the first occasion on which the Prime Minister had attended a league luncheon.

Mr. Forbes expressed appreciation of the opportunity of meeting Senator Greene. Mr. Forbes said he was interested in the league, particularly as far as tourist traffic was concerned.

CONFIDENT OF AN AGREEMENT.

Senator Greene said he appreciated the hospitality that was being extended to the delegation. "We have come with the desire to do our utmost to further a reciprocal understanding with New Zealand on trade matters," he said, "and we have been 4 met with such generous assistance, and in such a way that I feel confident before our discussions are concluded that we will be able to come to an arrangement which will be beneficial to New Zealand, and Australia." (Applause.) Dealing with the manner in which Australia had met. the depression, he pointed out that . the . depression hit Australia earlier than.it. did New. Zealand, and the Commonwealth had to meet it in a very much more drastic way. He thought -that-although Australia was not yet "outof the wood," Australia was getting the benefit of what she had done.

Australia, Senator Greene said, had taken two principal lines of actionone was frankly deflationary in character and the other. was what was termed "inflationary." The deflationary line was very much . similar to what New Zealand had had to do; the Government had to curtail expenditure, social services, pensions, etc., and the country had to face the conversion of its internal loan of £.550,000,000. Over 97 per cent, of the bondholders had accepted the inevitable and voluntarily converted. Interest rates were cut down in every direction, and wages were reduced very materially through the Arbitration -Court. All that was deflationary action which was inevitable.

DEBTS AND PRICES.

After all that was done, one great question to all intents and purposes had been left untouched, the question of the relation of debts and prices. It was quite true that nothing they could do could entirely eliminate the tremenclous disparity which still existed, and would exist till prices improved, between debts-contracted at the time of high prices and existing prices. Australia was in a slightly, different position,, in that she had .the' Commonwealth Bank, which to all intents and purposes was a central bank. Through that bank the whole of the national finance had. centred in the difficult times the country, was experiencing. Three principal steps taken gradually by the central bank had very materially assisted the primary producers of the country and all debtors to meet their obligations. In the main, said Senator Greene, obligations were being met. Owing- to the action of the central bank in handling the exchange between Australia and London, in tho creation of central • bank credit, and through the bank using its influence to reduce interest rates further, Australia had been assisted Viatorially to "get through." When the country, faced the depression it also faced a possible deficit of £40,000,000 on revenue account: a tragic position. Today, taking into account the surplus which the Commonwealth Government would show on its transactions for the year, it could bo said that the; country was approaching. Budget equilibrium. He was perfectly certain tha,t it would have been impossible to have got to that point, by purely deflationary methods.

EVIDENCES OF IMPROVEMENT.

Now, the country could see evidences of improvement. Unemployment figures ■were falling fast, and hethought that the Commonwealth Government would be able to reduce taxation next year. Further, there was a very definite improvement in trade, and the corner had been.turned as far as trading was concerned. "We are showing improved figures in ■ practically every branch of the ordinary trade of the country," he said. "All. that is required to put us on the road to a genuine and true prosperity is an improvement in world prices. " I do believe it is -possible after certain steps have been taken, to do something to restore world prices, and, above' all, give-that-confidence in new enterprise without which it will be impossible to get back to a prosperous basis." ' , ■