PUBLIC FINANCES

Timaru Herald, Volume CXLVI, Issue 21362, 3 June 1939, Page 3

PUBLIC FINANCES

WARNING BY BANKER REDUCING EXPENDITURE In the present circumstances, the only reasonable policy to be adopted by a Government was to watch costs and to reduce expenditure on public works until the defence programme was complete, said Sir Howard Lloyd, chairman of the Bank of Adelaide, at the annual meeting. At all times it was necessary to watch costs in regard to Government expenditure and business enterprise. The costs of government in Australia had reached a staggering figure, for a country of 7,000,000 people. It was thus obvious that when the national income had contracted and additional expenditure was required for defence, there should not be so much money made available for other public works and Government spending. Sir Howard Lloyd said that new loans totalling £14,250.000 were offered to the Australian public last year. It was significant that the Central Bank contributed about £9,000,000 to those public issues, which called for consideration as to whether it would be necessary to offer more generous terms for loans now proposed. The chairman added that the unattractive outlook of the wheat industry made Australia vitally dependent on the successful marketing of its wool. The intensely nationalistic policy of Germany, Japan and Italy, restrictions upon international trade, and the extensive production of staple fibre—an, industry which had developed into a serious competitor with wool—had all militated against high values. “A resuscitation of trade with those countries, which were, until a few years ago, potential operators in our markets, is essential, if only on a barter basis,” said Sir Howard. “It is to be hoped that the Commonwealth Government will actively pursue an arrangement which will have the effect of reducing the high tariff restrictions at present applying to Australian wools entering the United States.”