AUSTRALIA’S BALANCE-SHEET.

Taranaki Daily News, 10 July 1929, Page 8

AUSTRALIA’S BALANCE-SHEET.

Although for the year ending last month the finances of the Commonwealth of Australia showed, a deficit of £2,338,000, the Treasurer (Dr. Earle Page) claims that the position is really quite satisfactory. As in New Zealand, the Federal Government has in recent years passed legislation providing for certain annual payments in the reduction of the national debt. In Australia, in addition to the Commonwealth debt, there are those contracted by the various State Governments, and part of the latest arrangement, whereby all borrowing outside Australia by the States is to be arranged for by the Federal Government, was that certain payments should be made annually by the Commonwealth in redemption of State debts. In the year that has just closed these payments have amounted to £6.000.000. The Treasurer maintains that in view of their discharge the deficit does not indicate any cause for alarm. The shortage is attributed to a decrease in Customs and excise revenue, the causes for which are an increased use of Australian manufactures and the trade depression .brought about by the disturbances in the coal and timber industries. To these may be added the drop in the value of wool. As affecting Australia’s principal export the price of wool has a great effeet upon Customs receipts. When wool is at a high price commodities that are more or less luxuries axe in demand; when wool is depressed importations are reduced, and the revenue falls accordingly. What Australia has to face, in common with this country, is the problem of reducing costs of production. Even in the wool industry they have increased at a greater rate than prices in the most prosperous years, and now prices have fallen there is no corresponding drop in costs of production. Dr. Page has given no indication of the manner in which it is proposed to wipe out the deficit and prevent others accumulating. That is a matter which the Australian taxpayer /will no doubt become fully acquainted with in due course. One thing is plain, the strictest economy in administration nuist be exercised if New Zealand and rhe Commonwealth are to avoid an addition to the already heavy burden of taxation.