£3,000,000 CUT IN LOANS

Gisborne Herald, Volume LXVIII, Issue 20632, 13 August 1941, Page 5

£3,000,000 CUT IN LOANS

N.S.W. LABOR PROGRAMME FEDERAL AUTHORITY PREMIER EMBARRASSED (Reed. Aug. 13, 10 a.m.) ‘ SYDNEY, Aug. 13. The fact that the Commonwealth has taken far-reaching powers since the outbreak of war has set a large section of the community wondering whether, when the war is finished, agitation should be revived for the complete abolition of Australian States and their Parliaments. The latest instance of the clashing of Federal and State political interests is provided in New South Wales, Where the leader of the Labour Government, Mr. W. J. McKell, has been compelled to admit his inability to carry out his election programme because the Federal Loan Council, at its receht meeting, curtailed his borrowings by £3,000,000. One of Mr. McKell’s most attractive election promises was the abolition of the wages tax, from which the previous State Governments had netted in the vicinity of £4,000,000 yearly. Mr. McKell, who now finds himself in an embarrassing position, confessed last night that his Budget proposals will have to be recast, involving the abandonment of the contemplated public works. Mr. McKell complains that the dice was loaded against New South Wales at the Loan Council owing to the inequality of voting power of the States and the Commonwealth. The Federal Treasurer, Mr. A. W. Fadden, while sympathising with Mr. McKell, said if the Loan Council had fUlly acceded to all the State Governments’ requests, then the borrowings Would have required roughly £40,000,000 instead of £20,000,000, which could only have been raised by expansion of credit. Such a sum would have been spent in direct competition with the Commonwealth, whose resources of men and material were urgently required for war.