AUSTRALIAN RESTORATION.

New Zealand Herald, Volume LXVIII, Issue 20793, 9 February 1931, Page 10

AUSTRALIAN RESTORATION.

What is described as his longawaited financial policy has been expounded by Mr. E. G. Theodore, Federal Treasurer, to the Conference of Australian Premiers. On the cabled summary of his statement, there is justification for the comment that he has enhanced his reputation as a mystery man. Restoration of the 1929 currency levels is "what Mr. Theodore advocated. Many other people will join him in wishing to see it effected, but so long as he is silent about the means to be adopted, he has not advanced the position one iota. In fact, Mr. Theodore's policy statement is simply a restatement of the desired end, when what is needed is a working plan for reaching it. The Premiers arc said to have been left wondering whether Mr. Theodore's scheme is tantamount to inflation nr not;. There is some excuse for their bewilderment especially after his reference to a reduction of torcst rates. Judged most charitably the long-awaited policy can be characterised only as meaning inflation or nothing. If he docs propose to inflate the currency, the result can only be as described by the committee of experts, which has just issued its three-years' .plan for the restoration of Australian prosperity. This body says inflation is "not the road to recovery, but to collapse," and nothing better can be said for it. The committee is blunt and uncompromising in its statement of the remedy for the existing state of crisis. A saving of £15,000,000 a year in Government expenditure is its main recommendation. This is naturally based on recognition of the common-sense principle, which Mr. Theodore and his associates refuse to face, that when income shrinks, spending must be curtailed in proportion. The alternative is bankruptcy in private life. In a Government it becomes, as the expert committee points out, "default in Government payments," an outcome that would be productive of uncounted evils, spreading throughout the community. It is unfortunate for Mr. Theodore's reputation as a financier that his vague and elusive statement should have appeared simultaneously with the expert report. He avoids realities, the "committee faces them. That difference in-outlook is strikingly visible when the two surveys of the position aro read side by side.