FACING THE MUSIC

Stratford Evening Post, Issue 56, 3 October 1930, Page 4

FACING THE MUSIC

PLIGHT OF AUSTRALIA EFFECTS .OP HIGH PROTECTION. Visiting Wellington at present is Mr. H. Goodwin, a well-known commercial man who, though located in Sydney, pays New Zealand a visit every few years in order to keep up his business and social relations with people in this country. “It is problematical as to whether Sydney has ever been so directly up against it as she is this time,” said Mr. Goodwin. “The accumulation of Labour legislation of the last fifteen years brought about a false prosperity and created a public that spent as freely as any in the world, and this buoyancy was maintained more or less until the slump in the value of primary products began to tell its tale. Exports Count. “Whatever you may do in a country it is your exports that account for the new money coming in. Your secondary industries do not create any new wealth; they may create more labour and be a factor in the internal prosperity of a people, but it is the exports that maintain the equilibrium that is called the balance of trade. So immediately the slump in wool came a yesr ago the lack of • new money to meet what was being paid for imports was felt. It is the policy of protecting local industries that has helped to bring about hard times in Australia.

“Protection is all very well up to a point,” said Mr. Goodwin, “but in a country that has been so largely run by Labour Government conditions have been created that make that policy almost a menace. Take a look at Australia, with less than six and a-half millions of people, spread over a territory larger than the United States. Think of the troubles of transport, to begin with, and with the Arbitration Courts giving increased wages to all hands—you cannot raise the wages of one section of the workers without raising the other fellow’s wages—until it has become more costly to ship goods from Sydney to Melbourne than it costs to bring them from Canada or the United States. There is in that an initial handicap to everyone concerned in commerce.

No New Money. “Protection of local industries has been the means of forcing the prices of many things up instead of down. Take the classic instance of the Broken Hill Proprietary Ltd., producers of , steel, who receive almost as much in bounty on every ton of steel produced as would pay the basic wage allowed by the court in the industry. And yet Australia boasts of that industry! I think we pay 200 per cent, more for sugar than you do, simply because the sugar growers of Queensland have to be protected; and we are denied the big luscious bananas of the South Sea islands because the banana-growers of Queensland have to be safeguarded. It is all so futile, for while it is making the cost of living very high, it does not mean the production of any new money, nor does it help the balance of trade.

Sir Otto Niemcyer’s Mission. “It Is amusing to hear what is being said of the visit of Sir Otto Niemeyer to Australia,” said Mr. Goodwin. “I think he has been sent to Australia by the Bank of England to inquire on behalf of other banks concerned the condition of Australia on the spot—its stability as a debtor nation to those banks and to advise the Government what to do to maintain that stability. People may fume and fret, but Australia has got to face the music, and I think she will, as she is a great producing country.” Rationing the Staffs. • “In the meantime the first effect has been rather salutary,” Mr. Goodwin continued. “All the big stores in Sydney— Anthony Hordern’s, David Jones’s and the rest of them—have rationed their staffs, rather than put some of the hands off altogether. Batches go off one week in three or four or five. Rents for business premises and houses have fallen over 50 per cent. In some cases that I know great showrooms have been let, not for a rent at all, but for commission on sales and in almost every commercial firm the salaries have been reduced from the head down to the message boy. It has been a case of pressure. These things have had to be done. Trade with the United States has almost ceased, as there is an embargo on sending money back to that country. Your customs tariff here, say, on motor-cars, is an open book, taut the tariff in Australia is so sectionalised that it is impossible to tell the duty on a car straight off. On account of everything being sectionalised in order to protect local industries, there is a special tariff on springs, kingbolts, bumpers and other parts. It really takes ian expert to assess it. They have been known to take the springs off a new American car and weigh them, so as to get the poundage for customs duty purposes, all because springs happen to be made in Australia. “Your tariff here is not for protection purposes. It is preferential. With only 28 per cent, duty on English, 55 per cent, on Canadian, and 75.8 per cent, on American cars, a great chance is being given the English people to clean up. If they ■ cannot do It under that tariff they never will. Land of Youth. “It is part of my business to gather facts about Australia for my firm, about the population, where placed, transport, class of people, etc. It surprised mo greatly to find recently 40 per cent, were under the age of 19 years. That opened my eyes to the severe limitation of the spending class as a section cf the community as a whole.”