"LESS SPENDING"

Evening Post, Volume CXXX, Issue 26, 30 July 1940, Page 10

"LESS SPENDING"

MR. SPENDER'S "KITE"

AN UNPOPULAR DOCTRINE

(By Trans-Tasman Air Mail, from "The Post's" Representative.)

SYDNEY, July 10

The Federal Treasurer, Mr. Spender, a clever lawyer but inexperienced politician, and a comparative novice in public finances, has recently flown a kite. He advocated a policy of less spending by the public, and, though he is supported therein by anonymous conservative bankers, he has brought upon himself the arrows of criticism from business men and Labour and other politicians. Mr. Spender declared that restriction of private spending was necessary for the war effort. All the main indices of production, employment, and trade had shown since last September an expansive trend, he said, and the latest data to hand suggested that the position was at least being maintained. The national income had risen by 10 per cent, during that period; retail sales and employment had been above those of last year. In general, life had i gone on quite merrily, without any conspicuous tightening of belts. The Government had a duty to guard against inflation, and in a time oJ drastic economic change such as at present, the danger was immeasurably greater than normally. The origin of Mr. Spender's views soon became apparent in the ensuing controversy. Those who sprang chiefly to his support were banking interests and those whom Mr. Spender's opponents called "text-book" economists. They declared that his views were moderate; that there was no suggestion in his views of any sort of deflation. His chief anxiety was to guard against inflation, some measure of which was inseparable from war, and to readjust production by transferring labour from one employment to another. STATEMENT MODIFIED. This argument, Labour spokesmen were quick to point out, overlooked the fact that there was no need to transfer labour from peacetime to wartime industries because of the vast well of unemployed persons still available. Political Labour and trade union leaders were unanimous that Mr. Spender's policy would take Australia back to "the dark days of the economic depression." They said they saw in Mr. Spender's thesis an attempt to depress wages. One declared that the Federal Treasurer wanted to make Australia "a better place for big bankers, moneylenders, Jews, and big business." Yet a considerable section of "big business" —retailers and manufacturers—expressed as determined opposition to Mr. Spender's policy as the Labourites. They deplored the fact that Mr. Spender had made public a policy which departed so radically from any so far enunciated by the Prime Minister. Mr. Menzies, and determined by the Cabinet. Many of the members of the Government parties lined up against Mr Spender. The sight of his views ir cold print and an analysis of the expressed opinions evidently cooled Mr Spender's ardour, for about three days after he had stated his "less spending' policy he explained that what he meant was that people should spenc less on imported goods and luxuries With that mild dictum, few Austra lians disagree, but it is far from whai Mr. Spender said originally.