AUSTRALIAN FINANCES

Taranaki Daily News, 11 July 1930, Page 16

AUSTRALIAN FINANCES

HUGE BUDGET DEFICITS. PROBLEMS for treasurers. Melbourne, July 2. Viewing in retrospect . the . financial year just .closed in Australia, it is g® ll ' erallv admitted that such difficult and uncertain financial times have not been experienced since t-hb beginning o century. ' A few remarks on the unsauisfactorj nature of Australia s finances will pro vide indisputable proof of. the accuracy of this statement. During the past 11 months the trade returns of Victoria and New South Wales alone displayed an adverse balance of almost £40,000,000, if the value of the export , of bullion is excluded. The Commonwealth Treasurer has closed rhe financial year with a deficit of almost £3,W,000, . which, added to the accumulated deficit to June 30, 1929, will increase the Commonwealth’s deficits to approximately £8,000,000. The excess of expenditure over revenue in New South Wales will roughly approximate £4,000,000 and in Victoria £700,000; South Australia’s finances are such that the deficiency in that State will approximate £1,050,000, while Queensland’s finances disclose a debit balance of £7oo,ooo'.'’ The future* is full of difficulties, especially -by reason of low values prevailing in the world’s market for Australia’s exportable products, the heavy interest bill of all the Governments, and the decreased purchasing power of the community. •• The last factor has already been demonstrated in the taxation returns in South Australia, where the revenue for the past financial year already shows a decrease of £330,000, ns compared with the returns in 192829. What, then, will be the position during the next 12 months when industry and the community in general are now only beginning to “feel the pinch” of the acute financial depression? In some quarters it is anticipated that the value of the Commonwealth’s surplus exportable products for this financial year will recede to £100,000,009, as against an average of approximately £150,000,000 in former years. To permit of ft corresponding reduction in the value of imports, customs revenue would

probably suffer to the extent of about £8,000,0*00, despite the super-charges recently imposed. The various Treasurers, therefore, will have almost insurmountable difficulties to overcome to enable the Commonwealth and State Budgets to be balanced this year, but, at all costs, no matter what the remedies be, further deficits must be averted if Australia intends to revert to a sound and sane financial policy. It is, nevertheless, encouraging to witness the fact that the Commonwealth has redeemed the £5,000,000 Treasury bills which matured on June 30, and in this connection it is understood that portion of the shipments of gold from Australia some months ago was ear-marked for the redemption of these Treasury bills. So far as trading' in Commonwealth Bonds on the Stock . Exchange is concerned, the. tendency of prices has still been downward. During the past week the average rate of interest over the whole section lias further increased to £6 3s Id per cent. Short-dated issues are giving particularly good returns, and at the time of writing yields of almost 6 5-8 per cent, are obtainable from issues with a currency up to 2A years. Foreign corporations are now more disposed to remit their money overseas even at the high exchange costs, rather than invest them temporarily in Australia. In this policy they have no doubt been endeavouring to anticipate the possible results that may attend the visit of Sir Otto Niemeyer to Australia. In fact, they are saying that while it is possible to get the money out of Australia they will do so. Not for many years has the Stock Exchange market been in such a depressed and stagnant state as it is at present. Public buying is almost at a standstill, so much so that at each successive meeting of the exchanges, prices of even the foremost stocks have been marked down rather relentlessly. At the present juncture there are a number of stocks tliat -have touched new low levels for the past decade.