SAVINGS AND SPENDINGS

Evening Post, Volume CXIX, Issue 128, 1 June 1935, Page 8

SAVINGS AND SPENDINGS

Total borrowings in 1935-36 of Australian Governments, thrcfUgh tlie Loan Council, are authorised at 25 millions. This figure is given on the authority of a Sydney newspaper, and is five millions less than the total ■ borrowing anticipated by Professor Copland on May 24. It is equal to the figure giyen by Professor Copland as the annual savings which Australia makes through insurance companips and savings banks. The insurance companies and the savings banks, he says, have approximately 25 millions a year to invest; in normal conditions two-thirds of it is invested in Government securities; so, "there is a case here for a substantial volume of public investment." By "public investment" he means spendings by Governments whose securities normally attract two-thirds of the 25 millions which every year the insurance companies and banks have to invest. Boiled down, this means that the Australian Governments are spending on public works, etc., the millions that the above-mentioned institutions invest in Government securities (for lack of other investment) plus a few more millions. The money that thus goes into Government securities is essentially savings of the people; the real security for this money is the Government's name (behind which is its taxing and other powers).and the assets created by the .Government's spending, as in public works. The figures quoted by Professor Copland give food for thought. No buyer of Government securities is under the illusion that assets created by public works are equal to twenty shillings per pound spent. Buyers also know that the Government's taxing power may be used to tax interest as well as other things; that interest, even capital, may be reduced by the Government. Yet Government securities continue to be an indispensable field for the investment of the people's savings, and that fact continues to be an argument for Government spending (called by Professor Copland "public investment") ; and as things were in the beginning they are now. ;