ECONOMIC PROBLEMS

Poverty Bay Herald, Volume LV, Issue 17067, 27 September 1929, Page 7

ECONOMIC PROBLEMS

PROSPERITY HINDERED AUSTRALIA’S REDUCED INCOME SYDNEY, Sept. 17. In a speech to-day as the guest of the Constitutional Association, Professor J. B. Bridgen, a well-known economist, said the reductions in overseas borrowings recently forced ujmju Australian Governments, and the fail in wool prices, would reduce the Australian income received from abroad hv about £3O,CCO,CCO. The effect directly and through subsidiary industries might be to reduce Australian income by about 10 per cent, during the coming year. During the next few months, therefore, thep must expect a rather reduced general prosperity. Whether they would recover depended on the future wool prices, unless the world as a whole grew much more prosperous. The loan policy was a subject of political determination, but a permanent diminution in borrowing abroad was to be expected if a prudent policy was to be followed. Unless they could improve the productive efficiency they must expect less income to share in Australia With a diminution in export prices and borrowings a prospect of a permanent reduction in the present sources of income was a reality that bad to be faced. Unfortunately, they were faced with an increase in taxation. With the most favorable circumstances imaginable, there must bo a fall in the standerd of living of not loss than 5 ner cent-. Unless more income was produced it would be a gloomv outlook if the alternative of increased efficiency were not open to Australia. It was not impossible to increase efficiency by 10 per cent., or even moro.

There was at present no case at all, asserted Professor Brigden, for a reduction in wages, but there was a need for preventive action, which must lio chiefly in an attack on labor costs by management and labor together. It was an industrial. not a political, problem. A real danger to Australian prosperity lay in the curious Australian notion that legal tribunals determined the standard of living. Employers, bv their complaints, and politicians, bv their selfimportance. had encouraged that belief. The politician could do very little to help, but be could do much lo hinder; and the worst that could happen (o Australian industry was to have its attention diverted from the veal problems by a series of political wrangles.