RISING COSTS

Evening Post, Volume CXXVI, Issue 102, 27 October 1938, Page 8

RISING COSTS

WARNING TO AUSTRALIA

DANGER OF ECONOMIC UPSET

(From "The Ppst's" Representative.)

SYDNEY, October 14

A warning of the danger of an economic upset in Australia through a rise of costs and prices is given in the annual report of the Tariff Board. The board urges co-operation between employers and employees to keep prices within reasonable levels, and forecasts the need for restraint in granting fur-1 ther protection. "Unless industry keeps its production cost down a dangerous "rising spiral' of prices and wages will occur," it states. "A feature of several inquiries during the year was evidence of rising costs of production in Australia. Higher wages and shorter working hours, it was claimed, are already affecting the position. Fears have been expressed that National Insurance; measures will further add to costs.

"The granting of-highest wages, the best working conditions, and the greatest security to wage earners that can be afforded is obviously desirable. It is also clearly equitable that all classes should share in any general increase in the country's prosperity. Bitter experience of recent years, however, shows that if improved conditions result in serious increases in selling prices of commodities, their i benefit will be decreased. Should the 'rising spiral' proceed to a point at which requests for increased protection result the board is strongly of the opinion that the best interests of the community will be served by a conservative policy in the matter of granting such requests." The report points out that Australia's heavy dependence on world prices has a disturbing effect on its economy. "A few commodities exert a dominating in"fluence upon the general prosperity," it states. "The most important of these is wool. The effect of wool prices is felt in every State, not only by graziers, but also by storekeepers, merchants, and manufacturers. This has been forcibly brought home by the repercussions now being felt from the drop in wool income from £62,500,000 in 1936-37 to £47,000,000 in 1937-38." The president of the Employers' Federation (Mr. T. H. Silk), commenting on the report, said: "The Tariff Board has soundly pointed out the danger. I suggest stabilisation of wages for five years as a remedy. If there are no wage increases, then every increase in efficiency would mean that cost of production would fall. Every new machine would cheapen cost of production. The position now is that with every little advance up go wages. Twenty-five' years ago a working man on £3 a week was better off than the man now on £5 a week."