LYONS CABINET'S REBUFFS

Evening Post, Volume CXXIII, Issue 67, 20 March 1937, Page 8

LYONS CABINET'S REBUFFS

Australia's "trade diversion" policy —especially its quota features—has destroyed unanimity in the Cabinet, causing the recent resignation of Sir Henry Gullett, Minister in Charge of Trade Treaties. "Trade diversion" is a very naive expression of the modern policies of Governmental interference in trade, but the phrase need not be confined to Australia, for in other countries policies have been enforced that are in effect, if not by label, trade-diverting. Within Australia herself the special term "trade diversion" would not be applied to the inter-State marketing restrictions, yet what are these restrictions in effect but a diversion of trade? That reflection is gaining currency in Australia, because of the almost simultaneous arrival of the referendum No ("marketing") and the Cabinet differences on trade policies resulting in Sir Henry Gullett's resignation. The question is being asked: Have policies of interfering with trade gone too far, producing their own reaction? The very complexities of "trade diversion" when approached through bureaucratic channels are enough to split most Cabinet teams. Policy itself becomes confused in clouds of detail, and the resigned Minister himself remarks that the issues are highly controversial. Men like Sir Henry Gullett and Mr. Nash, approaching a problem that they may deem to be separate and isolated, are liable to find the problem linked up with others affecting Washington, Ottawa, and London, as well as Canberra and Wellington; which complexity means delay. Sir Henry's attempt to cut the knot with the weapon of Cabinet eloquence has clearly failed. The experiment (begun in 1934) of creating a special portfolio for a Minister in Charge of Trade and Treaties has also failed. That portfolio may disappear with Sir Henry. The Lyons Cabinet is weakened, but it is semi-officially stated that the resignation from the Cabinet of Sir Henry Gullett will not weaken in any way the purpose of the Government to establish the manufacture _of motor-car engines and chassis, which is a definite part of the ' Commonwealth's trade-diversion policy. Nevertheless, it is also stated that the Commonwealth delegates, on their way back from the Imperial Conference, will call at Washington.