NATIONAL DEBT.

Press, Volume LXVIII, Issue 20715, 28 November 1932, Page 9

NATIONAL DEBT.

o AUSTRALIA'S SINKING FUND. HOPES NOT REALISED. (ttlUJl UIT. 01VX COHMJSPOXDJSHT.) SYDNEY. November 17. Although in the nine years of its existence the Commonwealth Debt Sinking Fund has been responsible ior the redemption of £50,000,000 of Australian Public Debt, the bright hopes which animated its founders have not been realised. They foresaw the extinction ©i" the National Debt in less than a century, as a result of its operations. Actually new additions to the Public Debt during the period of the fund's existence have been more than three times as great as the subtractions made by the Commission'a efforts. Last year the Commission obtained dt7,200,000 to pay off public debt, but figures in the annual report show that during the same period the debt funis increased by more than five times the amount. More than .1100 millions is now owed by the Australian Governments. A definite plan is flow guiding the Commission's operations, and With a return to balanced Budgets, it may hope to overtake the additions being made to the debt and begin the big task of reducing it. Regarding the Commonwealth debt, provision is made for the redemption of the Post Office debt in 30 years by means of an annual contribution from revenue at the rate of 30s per cc-ni. State Debts. On other Commonwealth Public Debt the annual contribution is at the rate of 10s per cent., which was designed to redeem the debt in 50 years from 1923. Sinking fund contributions for State debts are in accordance with the Financial Agreement. On the debt existing to June 30th, 1927, the annual contribution waß 7s fld per cent., of which 2s Cd is payable by the Commonwealth and oB by the States. These contributions are calculated to redeem the old debt iii 58 years. On State debts created since 1927, the annual contribution is 10s per cent'., of which half is provided by the Commonwealth, and half by the States. These contributions are designed to extinguish the new debt in 53 years from the date of its creation. How Funds Axe Used. _ The Commission does not accumulate its furtds with the object of paying oft large loans on their maturity, but, so fiir as possible, expends its inconr; in the year in which the money is received. The ftinds expended by the Commission last year M T ere used to repurchase, or to redeem, Commonwealth and State securities. The bonds and stock so acquired were at once cancelled, and the National Debt reduced accordingly. Or. all the cancelled securities the Commission will in future receive frotji tlie Commonwealth and State Treasuries additional contributions which are in the nature of interest due on the cancelled securities. This will bring about practically the same result as if the Commission's funds accumulated at cominterest. The advantage of this plan is that it is unnecessary for the Commission to have in its possession large holdings of investments Since the Commission was set up in'l923 its total receipts for Commonwealth debt amount to £38,428,087. And since the establishment of the sinking fund for Slate debts, it has received £17,135.35;"". Altogether its_ receipts total £55,563,addition revenue amounting to ~li),;)80,138 has been appropriated "and used fdr debt redemption.