DEFICITS REDUCED

Evening Post, Volume CXIX, Issue 126, 30 May 1935, Page 8

DEFICITS REDUCED

-, AUSTRALIAN STATES

FEDERAL ASSISTANCE

(From "Tho Post's" Representative.). SYDNEY, May 23. Figures to. be submitted by the States to the Loan Council next week are expected to show that, in a single yeai* the deficits of State. Governments have ±.4,000 000. The estimate -iov this year was £5,800,000.. This marks anothe^ notable achievement under the Premiers' Plan, as the deficits fof the year ending June 30 next will be only half of the sinking fund payments during that period, and thus the .national,accounts will show'an actual surplus-of about £4,000,000 after, taking^nto account payments into the sinking fund. It is expected that £4,000,000 will be set down as.the,,objective to which the deficits for the coming financial year should be reduced. Although at ™« «ght the flxlng gf the deflcits for jy-JS-JB at a figure, no lower than the actual deficits for the current year would seem to be a departure from the principle of the progressive reduction m deficits embodied in the Premiers' Flan, the States last year paid into consolidated revenue; £1,750,000 from the special grant of £2,000,000 made to them by the: Commonwealth Govern: ment. As'this grant was non-recurring, a reduction1 of deficits for 1935-36 to the level of the deficits- for the current year would actually represent an: improvement in the State's Budgets of £1,750,000, compared with the current year. There appears to be no possibility that the Commonwealth Government will repeat its last year's action of making a special grant to. the' States tp assist in the reduction of deficits during the coming year. Last year's subsidy of '£2,000,000 was granted from accumulated surpluses. At present no such funds are available. ' The-Acting Treasurer (Mr. Casey) said that a large amount of money raised by Commonwealth taxation was returned to the States in the form of payments of various kinds. "A comparison of figures for the past ten years,", said Mr. Casey, "will show how those payments to the States have increased. In 1925-26 the payments by the Commonwealth to the States were £9,250,000. In 1932-33 they had grown to £15,250,000, in 1933-34 to £16,750,000, and in 1934-35 to £20,500,000. The payments and grants to the States are by no means confined to payments that the Commonwealth is obliged to make under the financial agreement. Such payments, for instance! in this year, come to less 'than £9,000,000. The balance of about £11,500,000 is made up of road grants (about £2,250,000), assistance to primary producers'(nearly £5,000,000), special grants to South Australia, Western Australia, and Tasmania (£2,400,000), and special norirecurring grants to all States (£2,000,000). ~ .'