Evening Post WEDNESDAY, JUNE 7, 1939. THE EXPANSION GERM

Evening Post, Volume CXXVII, Issue 132, 7 June 1939, Page 10

Evening Post WEDNESDAY, JUNE 7, 1939. THE EXPANSION GERM

For more than a decade Australia has pursued a plan for the expansion of manufacturing, and has therefore been able to plan in a true sense.. Australia, thanks partly to the restraining influence of the Australian Tariff Board, has not proceeded on the assumption that a manufacturing Rome can be built in a day. During the process of Australia's - manufacturing expansion movement, times have sometimes been good and have sometimes been bad; sometimes there has been a favourable balance of export trade (thanks to the farm) and therefore a plenitude of sterling funds, and sometimes the reverse has been the case. Australia has not waited for a critical dearth of sterling funds in order to make it a political occasion for launching a campaign of manufacturing expansion. Nor have Australian political leaders left the | public in doubt as to whether .the 'policy of restriction of imports is a temporary affair pivoting on a revival in sterling funds, or whether the twin idea, restriction-cum-expansion, has come to stay. In short, Australian political leaders have never clouded the issue with such variant statements as those of Mr. Nash and Mr. Savage when they ushered in our own restric-

tions policy. But notwithstanding the comparative clear-sightedness of the Australian Governments on an expansion policy covering many years, notwithstanding their realisation that manufacturing industries cannot be built up in a day, and notwithstanding the restraining hand of the Tariff Board, Australia is faced with a difficult problem of rising costs. This should be regarded in New Zealand as a warning against the still more difficult position in which the New Zealand Government's precipitate and little-considered measures are likely to place the country. If, after many years of a long-term plan, the Australians are in fear of inflated costs, planless New Zealand cannot escape the same penalty of costs merely by refusing to look at them. Australia today has at least this much to her credit—that she does not shut hej>j eyes to the danger. And this, as; already indicated, is partly due to tlie fact that the Tariff Board, though fit may be subjected to political pressure, has not yet become a mere party-political creature, and is able to advise the public in a voice r?/sjing above sectional intrigue and above the party battle. Quite a number of Australians hate the Tariff 'Board for speaking out, but no one accuses it of party or class bias. That is why, when its chairman challenges a project for building up a cotton industry over-night, the purjftic, if not the promoters, listen and feieed.

A rebuke to haste—a frebuke to which New Zealand should listen in —was sounded by the cb/afirman, Mr. McConaghy, within they^last month, when he pointed out £hat the Australian woollen industry had taken half a century to deve/iop; and that the project put before/ the board for rapid development of a cotton industry was "almost' beyond belief." Opponents of the project who gave evidence before thef board calculated that the duties a/sked for by the promoters would., mean that total protection would' increase from 48 [per cent, to 139,' per cent, as against British goods, a/ad from 63 per cent, to 300 per cent, as against Japanese and foreign; ?also that the extra cost to the Australian consumer would be £90(0',000 a year, the wages in the new1 -project only £270,000. Mr. McConujrhy s aid:

Perhaps n germ has got about, to push Australian industry ahead —at such a speje d that we will tread on ourselves :/f we are not careful. If we attempt to get the cotton industry ahead too awiftly we will come a thud.

In Australia they have at least a public bw3y like the Tariff Board that can adv'i?je the public concerning the expansion germ. In New Zealand there ifs no evidence-taking body that cfj.?i speak with a similar voice, for to fahose bodies that urge caution it is customary to impute tendencies political or reactionary, or at least unpro, gressive. The New Zealand restri ctibn-cum-expansion policy is them/fore not only more hurried and mo#e liable to "come a thud" than is Australia's policy, but is less under ch«3 ck by an informed public opinion.

It should be added that this is ,hfjr no means the first time that the Darin 0 Board has draAvn attention to fthe danger of a "thud" which, if it |» possible in Australia, is at least j

as likely to be attendant on the lessconsidered measures of another country which is already on a lower rung of the economic ladder. Summing up the Tariff Board's warnings last year and this year, the "Sydney Morning Herald" draws the moderate conclusion that, while "not yet alarming," they "certainly demand urgent remedy." Since 1936 the price indices of wagess and home-produced goods have risen, steeply, while the costs of imported] goods, at first following suit, hav?ef latterly dropped back. The tendency in home manufactures here is in sharp contrast with that in Britain and othe/r countries. The diagnosis declares that, with the enormous expansion of Australian secondary industry in recent years, there is. difficulty in keeping? up ! supplies to it. An imminent aggravation of this situation is the appearance of Federal and State Government as [competitors with private industry for available supplies by reason 'af the demands of emergency defence -works and equipment. As the Tariff Board has pointed out, industry is no» 'longer sustained by a rising tide of prosperity, and on that ground alone t'hte complaints of the rural (and e?£piorting) industries against the whole iicend of our economic system must be itsoriously examined. Perhaps the main difference between the New Zealand position^ and the Australian position is that New Zealand is viewing complacently a more deteriorated economic condition and Australia is somewhat concerned about a less deteriorated condition. When it is said in Australia, with truth, that "rising p/rices are no longer an index of prosperity, but rather of a lack of equilibrium Which is disorganising the national economy," the saenne remark is abundantly true ofy New Zealand. But Australia is tnot declining so rapidly that she dare not measure the rate of fall, and tjfoere is always hope for a navigator nvho has not completely lost his hearings.