COMMONWEALTH LOANS

Evening Star, Issue 18281, 22 May 1923, Page 8

COMMONWEALTH LOANS

HUGE SUMS TO BE RAISED. SCHEME FOR CO-ORDINATION,' A - memorandum has been issued by the Federal Government (says the ‘ Age ) in support of the proposal to be submitted, to the Ptemiors* Oonforenoe for the co-ordination of Commonwealth and ’ Stale borrowing. This is a theme which has been _ discussed for many years past, and successive Treasurers have attempted, without success, to devise a scheme acceptable to all governing authorities. The present colossal debt ■of the Commonwealth and States and the need for raising enormous sums within the next few years for the redemption of expiring loans now make the question ono of extreme urgency. In his speech at Perth the Prime Minister pointed to the obvious advantages to bo derived from proper co-ordination, and in the memorandum now issued to the Premiers and Treasurers these arguments are elaborated. It is shown that the increase in the State borrowing in the last seven years was from £88,471,724 to £146,295,100, and the Commonwealth borrowings leapt up from £3,401,257 to £12,656,407. The statement sets out that an estimate of the loan requirements of the Commonwealth and States tor the year 1923-24 shows that £45,000,000 will have to he borrowed to cover the schemes which are in hand, and a similar sum will he required in each succeeding year. The Commonwealth admits that it is powerless to effectively control the position, hut urges that a partial corrective can be applied by the provision of an adequate sinking fund. It is shown that a sinking found of 10s per cent, would suffice to redeem the debts in fifty years, and the scheme provides for the unfailing establishment of this fund. It is urged that if competition between the States and the Commonwealth in the raising of loans is to continue the result will bo disastrous. In order to prevent this clashing the Commonwealth proposes that there snail be a loan council, consisting of the Treasury of the Commonwealth and the States.- It is proposed that this conference ehall meet an nually in May, and Its function shall he to determine the order in which the Commonwealth, tho States, and the various public bodies created by State Legislatures should come into tho market within Australia, and advise each Treasurer as to the rate of interest upon which local loans should be floated. It is also suggested that each State shall ask for the necessary legislative power (where it does not already exist) to govern the loan operations of the municipalities and other public bodies. An estimate of the loans to bo required in 1923-24 is as follows:

Commonwealth ... £10,000,000 New South Wales ... ... 9,000,000 Victoria ... 9,500,000 Queensland ... 4,700,000 South Australia ... ... 7,500,000 Western Australia ... ... 3,600,000 Tasmania 700,000