The Evening Star SATURDAY, OCTOBER 19, 1929. AUSTRALIAN FINANCES.

Evening Star, Issue 20310, 19 October 1929, Page 14

The Evening Star SATURDAY, OCTOBER 19, 1929. AUSTRALIAN FINANCES.

Mr, W. L. B.uoltel’, member of a well-known Melbourne firm of land, estate, and financial agents, happens to be in America at the moment, and has been doing his best to reassure New York financiers on the matter of Australia’s credit. Tho Commonwealth has had plenty "of previous experience of Labour in power, and the most lasting impression of such regimes is that of an increase in the public expenditure quite out of step with any increase in tho revenue, with a consequent mounting up of tho national debt. Tho London Stock Exchange has noted that tendency during even the Bruce-Pago seven-year rule, and has repeatedly given hints that further approaches "for loan flotations would not be enthusiastically received. The only response ou Australia’s part lias been the occasional recourse to New York for money, and Mr Baillicn’s statement to the American Press as to Labour’s intention to seek a safe line in finance savours of preliminary propaganda in case Australia finds it expedient once again to invite the notice of tho American investor. As a. .matter of fact, one of Mr Scullin’s election, planks was local borrowing. That this has already been resorted to on a fairly largo scale by his predecessors is shown by the latest half-yearly report of the Commonwealth Bank, whose investments are shown to include a much larger proportion of Commonwealth loans than a year ago. The main reason lor this is disclosed as the rise in interest rates at international centres 'and the lower prices for Australian primary products. These cannot bub react upon the country’s loan programme, and the hank’s report points out that the exposition to lenders overseas of Australia’s ability to indulge in a little self-help may be of advantage in respect to the future. Apparently the fixed policy and intention is to go on borrowing abroad "whenever’ conditions are favourable, and, when they are not, to draw on Australian capital resources. The prospect for tho Australian taxpayer of to-day and for posterity is not altogether alluring. With her State Parliaments as well as Canberra Australia is overgoverned, for the same establishments would suffice for a population' five times the present' size. It is the scale of expenditure by the State Governments which is now' causing the greatest uneasiness. During the fiveyear period 1923-23 tho States increased their public indebtedness by £175 millions as against the Commonwealth’s increase of only £l4 millions. In the same period the taxation collected by the States lias increased £l2-5- millions as against the Commonwealth’s increase of £6:l millions. Even so, the States’ revenues have nob sufficed to balance their budgets, since ail of them showed deficits. At Juno 30, 1928, the combined Federal and State taxation averaged £l4 Is 9d per head of the population, a rise of nearly 14 per cent, in a five-year period. In addition to tho steadily increasing loan expenditure on works, heavier interest rates on renewal of old loans have contributed to tho heavier demands of the taxgatherer. Mucli of the expenditure on works has been duo to the transport revolution era. A writer in Australia’s best-known weekly 7 states: —“The internal combustion motor and its child the motor car have been mixed blessings to the Commonwealth. Before the aroma of burnt petrol was known in the land Australia had practically become self-supporting in the realm of transport. Railway locomotives and rolling stock were manufactured domestically, and in the breeding of horses and the manufacture of vehicles and harness the country admitted no super- , iors. After tho advent of the conquering car tho scene gradually changed. A new standard of luxury has been set up, transport has been Americanised, the breeding of horses and tho buggy and harness trades have been discouraged. Withal there lias been tho triple drain of huge payments lor imported cars and petrol, heavy losses on railways, and a vastly increased expenditure on roads.” ■ .The remedy recommended. is that Australia should manu facture her own cars; but, until her coal mining industry comes to its senses (of which the latest indications are less promising than ever), neither this nor any other heavy industry Ims mucli inducement to launch out.