The Timaru Herald. WEDNESDAY, APRIL 9, 1930. CHANGING FISCAL POLICY.

Timaru Herald, Volume CXXV, Issue 18539, 9 April 1930, Page 8

The Timaru Herald. WEDNESDAY, APRIL 9, 1930. CHANGING FISCAL POLICY.

American newspaper critics are seizing upon the emergency measures proposed by Australia in an effort to correct her adverse trade balance, as affording a favourable opportunity to attack the advocates of free trade within the Empire. The Americans say that the new duties are “symptomatic of a state of mind which cannot but affect America" as well as Britain. The plan cannot but damp the ardour of the advocates of Imperial free trade” since, as one journal says: “It cannot be ignored that the tendency in the Dominion is clearly toward more and not less protection.” Synchronising with the bold stroke of economic policy in which Australia is indulging, comes further statements by Mr Baldwin, which hardly touch the vital issue in Australia. But it is obvious that Australia has been compelled to have recourse to heroic measures, not exactly for protective purposes, but in reality, as a barrier against the ever-increasing inflow of oversea goods. That a leading article in The Melbourne Argus, on Mr Baldwin’s project for an Imperial trade treaty should bear the heading: “The Imperial Trade Chimera,” is most signilicant. The Melbourne Argus, one of the leading newspapers in the Commonwealth represents the best type of Imperial thought in that country, and it would be the last journal likely to offer captious opposition to any Empire project. It states that Mr Baldwin’s plan to knit the Empire together in an economic bond of mutual interest is one of those splendid conceptions which fails utterly when the touchstone practicability is applied to them. Similarly, the equally chemirical scheme of Empire Free • Trade fathered by Lord Beaverbrook since The Age says it takes no account of actual conditions in the British overseas nations, particularly in Australia. The actual position which must be faced in Australia is that the country has a unique distribution or lack of distribution of population. More than one third of its people are located in the two great cities of Sydney and Melbourne. Whether this is a good or a bad state of things, it is a fact arising from the peculiar circumstances of the early colonisation of Australia and must be faced. These people must be fed. They cannot be fed without secondary industries, because they depend on secondary industries to provide them with employment, and Empire free trade would make it impossible to maintain the great bulk of the urban population of Australia. Imperial preference affects Dominion policy so vitally that it becomes more than a question of English politics. The opinion even of such a sedate and conservative journal as The Melbourne Argus is that “any plan which involves the regimentation of the tariff policy of a Dominion, to bring it into harmony with the tariff policy of Britain, strikes a direct blow at Dominion self-gov-enrment. If The Argus is impelled to speak so candidly, the views of the more radical schools or thought, even outside the Labour Party can be imagined. The Argus points out that an intergovernment agreement for trade reciprocity could be based only upon an honourable understanding, seeing that no Parliament can bind its successors. If the objective sought by Mr Baldwin or by Lord Beaverbrook could be achieved by a treaty, such a treaty, assuming a changed condition of political feeling in any one of the Dominions, might The Argus says, strain the Empire bond almost to breaking point. The practical difficulties are insurmountable. The Australian critics point out that it would be an advantage to Australia to have its sugar admitted to England on more favourable terms than foreign sugar, if black-labor sugar from the British West Indies were admitted on similar terms. Australian wheat would he at a disadvantage with Canadian wheat because of heavier freight charges. Complications would be caused by the fact that economic unity could not operate solely between England, on the one hand, and the Dominions on the other. It would have to operate between all members of the Imperial family. This would threaten chaos. Then the existence of foreign trade treaties would cause other difficulties. In these circumstances the leading Melbourne and Sydney journals point out that all talk of Imperial free trade or of greater Imperial preference has fallen as flat in Australia, as did the talk of Imperial Federation years ago. Australia makes real sacrifices for Imperial preference, and there is no likelihood in the present financial situation that she can do more. The present Government in Australia is determined, and is really forced to restrict imports, and it appears as the American writers suggest that an era of still greater protection lies before the Commonwealth. There had been rumours for some weeks —too persistent to be ignored—that the Commonwealth Government proposed to introduce a customs super tax on all imports as the most speedy

method of rectifying the adverse trade balance. Hence for the moment, Australia’s economic position would make it impossible for her to dream of accepting either the scheme propounded by Lord Beaverbrook of by Mr Baldwin.