Borrowing and business in Australia

Bibliographic data

Monograph

Identifikator:: 183051623X

URN:: urn:nbn:de:zbw-retromon-222122

Document type:: Monograph

Author:: Wood, Gordon L. http://d-nb.info/gnd/1239193688

Title:: Borrowing and business in Australia

Place of publication:: London

Publisher:: Oxford university press, H. Milford

Year of publication:: 1930

Scope:: xv, 267 Seiten; graph. Darst.

Digitisation:: 2022

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part V. Australia during and after the great war

Collection:: Economics Books

CONTINUOUS BORROWING 237 ment of the national standard of living to its economic maxi- mum. The final form of the test to be applied, therefore, becomes a comparison between indebtedness as measured by the annual interest charge, and productivity as measured by the value of the disposable national income per head; and Dyason would seem to be guilty of a false economic emphasis when he regards the proportion between external debt and total wealth as the critical test to be applied to the public debt. This is the more remarkable since he does proceed to an excellent comparison of productivity, national dividend, and annual interest payments. The disposable income which is capable of application in discharging external indebtedness consists of those products which have been called in an earlier chapter foreign-trade com- modities. The Commonwealth Statisticians estimate of the value of Australian production is arranged in six divisions, viz. agricultural, pastoral, dairy, forestry and fisheries, mining, and manufacturing. Of these it is safe to assume that not more than 10 per cent. of divisions IV and VI enter into foreign trade ; indeed from the calculation by Wickens noted previously this would appear to be a liberal estimate. The remainder of total production can therefore be accepted as a fair estimate, com- parable from year to year, of disposable income. The second table with this alteration. and brought up to 1927, is given on p. 238. From this analysis some very important results are to be obtained for the purpose of estimating the relative marginal productivity of the debt from year to year. and hence of Australia’s capacity to borrow. These may now be summarized: (i) The ratio of total debt to production rose from 10-8 to 13-3 per cent. in the nine years. That is to say, the per- centage of that part of the national income used for paving for overseas debt increased by 23 ver cent. (ii) The ratio of the external interest to production, i.e. the ratio of annual overseas interest to that part of the national income available for that purpose increased by 22-5 per cent. (iii) The ratio of the external debt to the whole national dividend rose from 3-5 to 4-6. an increase of 31 per cent.

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