Evening star., 1933-10-08
Australian Prosperity
Encouraging to Europe
BY A. G. GARDINER.

LONDON, October THE feeling
that the world depression is beginning
to lift was greatly strengthened this
weeA by news of the Australian budget
whilh Premier Lyons in introducing II
described as a message of hope and
faith in Australia.
The character of the budget came as
an agreeable surprise here. The Lon
don Times says it is certainly the near
est approximation to prosperity budget
which yet has been seen anywhere since
the beginning of the depression and the
Manchester Guardian halls it as most
encouraging and optimistic piece OF
work Added to the remarkable decline
in unemployment figures. not merely In
this country, but on the continent with
the exception Of the Danube states, this
development is welcomed as strong eVl-
dence of turn in the tide.
More weight is attached to the omen
because Australia was the first country
to feel the full shock of the wave OF
depression and was reduced to the most
desperate financial straights before the
blow first struck Europe and while
America was still on top Of the wave Of
prosperity The outlook was aggravated
by the decision of the Lang Labor gov
ernment in New South Wales to default
on vast British loans. and the gravest
anxiety prevailed in regard to the fu-
ture relations of the two countries. Not
only had immigration to Australia
ceased. but the flight of impoverished
cettlers back to England to share in the
dole added to the unemployment burden
of the mother country. Fortunately the
commonwealth repudiated Lang and,
with the confidence of the British in
vestor restored in the financial integrity
of Australia. Premier Lyons was able to
carry through the great debt conversion
scheme which substantially eased the
financial situation.
This, however. is only the secondary
cause of the Australian recovery. The
main cause was more fundamental and
encouraging. Australia'S catastrophe
arose from the collapse Of world prices
Of raw material, especially wool, which
fell to level far below the cost of pro-
duction. During the past year definite
recovery has manifested itself and the
high level of prices realized in recent
wool sales is regarded as symptomatic
OF genuine economic recovery in the
commonwealth and. incidentally. of i'm
provement in world conditions generally.
This is reflected in the substantial in
crease in the yield of taxation which
has resulted in surplus of over s2s.-
100000 instead of an estimated deficit
OF S7000.000. The burden of taxation
will be reduced, with the expected effect
OF further stimulating trade, and drastic
salary cuts made in the early days of
the depression are being restored.
Two grounds of satisfaction are felt
mere at the Australian revival. One is
general and the other particular. The
TrSt Is the significance of the fact that
the country which was first driven by
depression into drastic reductions in ex-
penditure and equally drastic increases
IN taxation should be the first to show in
terms of budget that the depression is
passing. 1t Is not unreasonably believed
that although Australian sails are the
first to catch the trade winds. the rest
OF the world will not be long in sharing
the experience. Indeed, Neville Cham
berlain. chancellor of the exchequer,
this week gave the most encouraging
account Of the improvement in British
revenue returns which. if maintained
will make the next British budget also
prosperity budget and enable him to
give relief to the taxpayer.
The particular ground for satisfaction
is that the Australian budget gives con-
siderable direct reductions on imports
from Great Britain Under the Ottawa
agreement. Australia undertook to give
preference to a wide range of British
goods, but hitherto this preference has
been largely illusory. consisting not in
reducing duties on British goods but in
increasing duties on foreign goods. The
same complaint has been made in re-
gard to Canada. BY the present budget
Australia converts preference into real
ity by making an estimated total maxi
mum reduction in duties Of 1712 per
cent.
(Copyright, 1897