Manawatu Evening Standard. THURSDAY, APRIL 10, 1930. A DRASTIC REMEDY.

Manawatu Standard, Volume L, Issue 114, 10 April 1930, Page 6

Manawatu Evening Standard. THURSDAY, APRIL 10, 1930. A DRASTIC REMEDY.

The Australian Labour Government is taking drastic setps to restore the trade balances, which are so heavily against Australia, and in its opinion have militated against employment. Not only has it heavily increased the duties upon importations competing with Australian manufactured goods, by doubling in many cases the import charges formerly levied, but it has actually prohibited the importation of certain goods and is partially prohibiting certain other lines on the rationing principle, under which importers will be restricted to 50 per cent, of last year’s imports, and a heavy surcharge duty or super-tax is also' imposed on certain other lines which have been listed by the Minister of Customs. The steps *thus taken suggest that Mr Scullin and his colleagues take a very serious view of the economic position of the Commonwealth. Such heroic measures have never previously been attempted by any Government. Their effect must be far-reaching, as it is estimated that the imports will be reduced by £40,000,000 and that the Customs collections will suffer to the extent of from £10,000,000 to £12,000,000. Gold shipments to London within the past few months have amounted to £24,000,000, the money, 'so it is stated, being mostly required to meet interest payments on Commonwealth loans raised abroad amounting, apart from the State loans, to well over £200,000,000 sterling. The interest payable in London on Commonwealth u nd State loans is stated by a Sydney paper to amount to £30,000,000 per annum, and, for the first seven months (July Ist, 1929, to January 31st, 1930) of the current financial year imports have exceeded exports by £30,764,304, against an excess of £5,311,144 in the corresponding period of the last financial year... -The public debt had been augmented by loans totalling £226,000,000 during the last ten years and it was therefore imperative", with imports exceeding exports, that drastic measures should be taken to stqp the drift to leeward. It need not for a moment be supposed that Australia is unable to meet her obligations, or that there is any likelihood . of any portion of her debt being repudiated. The British Economic Mission which visited Australia and reported upon "its finances, while expressing the opinion that the Australian loan ..policy* was unwise, found that the borrowings were still “well within her actual and potential resources.” But it was

patent that, those resources were being l severely strained, and that the rate at which borrowings were proceeding could not be k’ept up. In three years—l92s- - borrowings of the six States had increased by £75,889,318, and the Commonwealth had increased its indebtedness by £30,119,680, Australia’s total borrowings during the threeyear period being thus increased by £106,008,998. Of the States, New" South Wales which, during the period referred to, was under the Labour Government, with Mr Lang at its head, showed the greatest increase in its indebtedness, but the expenditure of borrowed moneys throughout the Commonwealth on a lavish scale was pretty general. And now a stern effort—described as both “amazing” and “stupendous”— is . being made to balance the national iedger.

AUSTRALIA’S DIFFICULT ' POSITION.

The restriction upon imports, coupled with the protectionist tariff previously inaugurated, means, as already stated, a loss of from ten to twelve millions in Customs collections, which will have to be made good by direct taxation that is bound to press heavily upon the payers of income and land tax, unless the Commonwealth Treasurer, Mr Theodoi’e, takes a leaf out of Canada’s book by levying a sales tax; but, even then, it will be necessary to increase the taxes already mentioned. Wisely enough, the imports actually prohibited, and those upon which super tax is to be levied, are luxuries which can be done without. The etfect of the new order of things at the Australian Customs is regarded at Washington as imposing “the highest tariff barrier in the world.” It will stay the increasing trade with the United States where the Department of Commerce officials predict a decline of approximately 50 per cent, in American exports to Australia, and that is by no means a bad thing. But it will also seriously affect trade with Great Britain, and effectually destroys Lord Beaverbrook’s campaign in favour of Empire free trade. It may also add to the unemployment, which is proving such a difficulty at Home, the British potteries trade being possibly the most serious sufferer. Shipping interests are also affected, and the Commonwealth itself is likely to suffer in consequence, unless labour costs and the costs of production generally can be reduced. And here, possibly, Australia is facing her greatest difficulty with Labour Governments in office in the Commonwealth and 1 in three of the six States, all. of whom are expected to maintain standard rates and conditions for the employment of workers, which are admittedly uneconomic. The enforced dismissals of workers at Port Kembla, and the reduction to half-time employment of large numbers of workers in the South Coast ' collieries, owing to slackness of trade, come as an additional blow to the workers in the Mother State. Australia has never seen darker days than those now confronting her. “Thousands of men have been put off railway and other construction works” simply because “Governments did not have the money to carry on,” and “other thousands have been put off from private service,” is the statement made by one Australian journal, the employers in most cases having “no more choice than the Governments had.” And this state of affairs has been brought about by maintaining an artificial standard of living on borrowed money. There is more than a danger that, if our New Zealand Government does not take warning from Australia, we may find ourselves in much the same position later on, for, on the per capita basis, the national debt of this country is on much the same scale as Australia’s and, as we pointed out the other day, imports are again exceeding exports, the need for. caution, both in the national expenditure and keeping trade within its reasonable limits, being thus obvious.