"DEFYING AUSTRALIA"

Evening Post, Volume CXIII, Issue 15, 19 January 1932, Page 7

"DEFYING AUSTRALIA"

LANG GOVERN If ENT

LOAN COUNCIL'S PROBLEM

(From "The Post's" Reprassntatlve.) m SYDNEY, 14th January. Twenty-seventh of January, or thereabout is likely to be a fateful period for the New South Wales Laibour Government, for on that date' the first meeting of the Australian Loan Council since the, last Federal elections will be held. The new Prime Minister (Mr. Lyons) j.s a firm believer that it is the duty of the council to police the. Premiers' Plan, under vhich a check is kept on the financed of the various States, and he has mtafc than once expressed his .determination that tho Plan shall bo adhered to strictly.. Tho position of New South Wales, therefore, is likely to keep tho council very busy for some time. Mr. tang's: deficit for the first six months .of the current financial year was ;£ S.aTS^eS, which exceeds his estimate of the! shortage for the wholo year. It is a fact that the greater part of the revenue, in the form of income-tax, will not pour into the Treasury until the last three months of the year, but it is alsjo certain. that the, total: tax will fafll far short of the estimate. No matter -what happens now, Mr. Lang cannot avoid a deficit far greater than that permitted: under tho famous Premiers' Kan. It was ■learned during the week-end that Federal. Ministers we're alarmed at the drift of liiances iii New South Wales. They, were alarmed at the great increaso in the expenditure on social services,' which, they say, is jumping ahead of the unemployment increase in a phenomenal way, indicating lax control' on the part of 'the State authorities. Tho new Cabinet has already considered tho position, and each member, has been given a special statement ao that the whole question may be cofcsklered from eveh-y point of view before the Loan Council meets on 27th February. It is notable that Mr. Lang has already indicated his intention of attending the Loan Council meeting and placing before it tho case for New: South Wales. With. 'Mr. Scullin out of power; he -Will not havo such a sympathetic audience as he has been accustomed to.

UNDER PREMIERS' PLAN.

Mr. Lyons has admitted that one of the greatest problems facing the new Government is that of fihance.. . He has refused to comment specifically on tho serious state of affairs in New South as ho does not desire to discriminate between . the States, but ho emphasised that it would be the duty of the Loan Council to make a searching, review of the efforts of all the Governments to honour their obligations under the Premiers' Plan, to ascertain the extent of' any financial drift, and to devise means, where' necessary, to stem tho drift. It can be definitely stated: that tho Federal Government will not subscribe to a policy of starving Mr. Lang out of office, but will insist that he should honour his promises' under tho Melbourne agreement. Tho view is general among tho Ministers that all the other States are honestly trying to fulfil their obligations, but th,at the New South "Wales Government is "deliberately flouting tho rest of Australia."

The question arises, what action would Mr. Lang take to recoup his Treasury if Loan Council assistance is reduced to a minimum. It has been suggested that his Government would retaliate by bringing down legislation to invade Federal fields of taxation. The highest Constitutional opinion agrees that a State Government is entitled to invade any field of taxation now occupied by the Commonwealth, except that of Customs and Excise. It is even held that tho Sales Tax is not a duty of excise. tlnlcss Mr. Lang could devise other means of raising funds it is certain he could not retain

office for many months without the assislanco of the Loan Council,, winch guarantees all bankoverdrafts. -Witft--outs that guarantee bank adVanCes would cease. It has also been suggested -that if Tie disagreed with the Loau Council Mr. Lang might proclaim a State of national1 emergency ami' attdmjjt' to rale by proclamation. Constitutional lawyers are emphatic that such'a eourso wonM be impossible-. The1 Constitution makes tAcway of a wouldbo dictator hard. Of course1, there aremany* who would say1 that already Mr. Lang is a dictator, but the fact remains i that when' he does dictate1, except t» his, own Ministry and ': the taboui- nwovenYenf generally, he is always careful to keep within the Constitution.; And his greatest obstacle is still the Legislative Council.