BIG CREDIT

Otago Daily Times, Issue 21647, 18 May 1932, Page 4

BIG CREDIT

AUSTRALIA’S OVERSEAS TRADE DRAG ON' DEBTS t (From Our Own Correspondent.) SYDNEY, May 12. There is genuine cause for gratification in the monthly statistics of Australian oversea trade which disclosed that for the first nine months of 1931-32 there was an excess of exports over imports amounting to £30,659,000 sterling. This surplus for nine months is more than sufficient to meet the Government oversea interest and other commitments for'the whole or the year. Of this balance of £30,659,000, the commodity balance, that is, the excess of merchandise exports over merchandise imports, is £25,634.0Q0 sterling, and the gold and silver balance is £5,025,000 'sterling. The establishment of credits, on account of Australia, to the amount mentioned, after paying for imports is specially helpful in view of the present costs of transferring Australian money to London for the settlement of other obligations. It ,has been estimated that the sum to the good, which is disclosed in the trade account,' provides sufficient credit in London for .the settlement of Government obligations there in the form of interest on Government debts and for governmental services. Progress in that direction —preserving, or, better still, increasing, the favourable balance in the external trading account —is obviously most desirable. that is done, however, more will remain to be accomplished. It would be wrong to assume that Australia was out of the wood. There are substantial accumulated deficits on account of most" of the States which must be liquidated, j The Commonwealth has a floating short term debt of nearly £79,000,000. That should be funded at the earliest possible moment and arrangements made for its discharge. Each State has much to the leeward, and until •these accumulated debits have been dealt with financial ease is not likely to be restored permanently to the Commonwealth. Prospects of balanced budgets, if not this year, within the ensuing year or two are encouraging in respect of most of the units of the federation (excluding, of course, New South Wales), but as yet there is no justification for suspending the rigorous policy of economy in all directions. It has been specially unfortunate for Australia that the export season, which is now near its close, has been one throughout of relatively low prices. Wool, wheat, meat and fruit —Australia’s principal primary products for export—have contributed to the country’s funds in London on a greatly reduced scale compared with normal years. Returns derived from those sources, consequently, have been insufficient to function effectively as an influence for the provision of funds in Australia upon which depends largely the spending capacity of a considerable section of the community. That lack has caused, in turn, a diminution in the field for employment, with all its consequential problems.