RISE IN IMPORTS

New Zealand Herald, Volume LXXV, Issue 23201, 22 November 1938, Page 7

RISE IN IMPORTS

EXPORTS LAG BEHIND REDUCING THE GAP SUGGESTION IN AUSTRALIA Attention to tlie yap between exports and imports is drawn bv the National Bank of Australasia, Limited, in its latest monthly review. The bank suggests that the proper remedy is a reduction of prices for locally-manufactured goods. The review points out that from the end of Juno to tho middle of October export prices fell by 20 per cent, compared with the average for 1937-38. An estimate of the effects of lower prices and reduced outputs on the aggregate incomes of rural producers at this time can only bo a very rough guess. Production may be better than, expected, and prices may commence to move upward. It does appear, however, that further reduction in imports will be necessary to compensate for the prospective reduction in the value of exports. The pronounced rise in imports and their continued high rate of inflow- indicate that Australian prices are attractive to manufacturers and merchants in other parts of tho world, the bank continues. The means of reducing imports is not by higher tariffs or exchange rates, but by lowering selling prices of Australian merchandise in the local markets. This would, no doubt,. involve a determined drive for higher efficiencies and for some degree of rationalisation, and might, require a narrowing of profit margins, but it would bo the sound course, the bank considers. Within a relatively short period the advantages would be greater than tho initial disadvantages. The way out of the last depression was opened by the many adjustments made by manufacturers and other business men in order to increase efficiencies and lower costs and prices. Local goods became competitive with imported wares, employment increased, and demand expanded. Tho drain on London funds eased off, tho financial position strengthened, and the movement toward a new prosperity was begun.