AUSTRALIA AND DEVALUATIONMR CHIFLEY UNDER FIRE FOR MAINTAINING EXCHANGE RATE

Greymouth Evening Star, 21 September 1949, Page 5

AUSTRALIA AND DEVALUATION — MR CHIFLEY UNDER FIRE FOR MAINTAINING EXCHANGE RATE

SYDNEY, This Day '(Rec. 9 a.m.)’. —-Observers >in Canberra say that the Prime Minister (Mr Chifley) made the decision to retain Australia’s 25 per cent exchange without consulting Cabinet. One correspondent adds: “Political considerations undoubtedly had an effect in election year because the primary producers would have resented at the ballot box . a reduction of the 25 per cent bonus. The Australian decision is a stop-gap which may be reviewed in the light of experience.” The Melbourne Herald terms the Australian-move a bad decision adding: “Australia will not only continue to pay a premium on sterling imports/ but- will -find it. still more difficultto buy dollar essentials. Our relations to sterling have long been unreal and their maintenance jwill encourage inflation. The wise course would have been to appreciate the Australian £, preferably to parity with sterling.” Major Effects Listed The major effects in Australia, ac- •' cording to experts in the various industries involved are expected to be as follows:— '■ Wool.—Prices rose to 10 per cent, at the Sydney wool sales yesterday, but brokers expect more stability /and Canberra officials predict that the United States will buy more wool. They also expect black market dealings by other countries in Australian wools to cease; . Wheat.—Prices are expected to rise

in terms of Australian currency. The Wheat Board has made a “nominal” increase of 6s a bushel in the export price.

Dairy Produce.— Producers of butter and eggs may be placed at a disadvantage as their goods are sold at a fixed price under contract with Britain; Since the relation of the Australian £ to sterling is unchanged, the contract price will not automatically change but a review of prices may be sought. f ■ • Cars.—Prices of American cars and other vehicles will rise, but not over the full value. From 55 to 60 per cent, of the value of most American cars represents parts and work _ done in Australia.- The increase will be solely on that portion of the car imported. Tobacco.—A price rise is inevitable on American supplies unless the Federal Government reduces the excise duty. Most of the tobacco now being imported, however, comes from South Africa and will not be affected. Films. —Experts differ on the immediate result. The managing director of an overseas film company said: “It is now barely, worth'bringing our films to Australia.” An exhibitors representative, however, predicted that, there would be no rise in admission prices. Travel. —Fares to America have increased overnight. A Matson Company official, quoted the flat rate to America as £2Ol (Australian) as against the previous rate of £l4O (Australian).