PREMIERS’ PLAN

Nelson Evening Mail, Volume LXIV, 20 June 1931, Page 7

PREMIERS’ PLAN

COLOSSAL LOAN CONVERSION DRASTIC ECONOMIES REDUCTION OF INTEREST RATES SYDNEY, 12th June. The Premiers’ Conference, one of the most momentous held in the history of Australia, ended this week after nearly a fortnight of deliberation. Its decisions will alfect Australian public and private finance for a generation.* Apart from the reduction of Government expenditure on wages, salaries, pensions and other controllable payments, the most important-act of the conference was the decision to reduce the internal interest burden by- £0,500,000 a year. This will be effected by the greatest loan conversion operatioh in British history. The whole of Australia’s internal indebtedness of £550,000,000 will be converted into a new issue at new rates of interest, which will give effect to the conference’s decision that the internal rate must be reduced by 221 per cent. Overseas interest will not be affected by this decision. The Commonwealth Government has agreed to an average reduction of all Government wages and salaries to 20 per cent, below the 1030 levels, and, the same principle has been extended to old age and invalid pensions, war pensions, superannuation pensions and the maternity allowance.

The liftw'securities in the conversion loan are to he exempt from the present super-tax of 0& per cent, and from any additional taxation imposed on income from interest. Reductions of private interest rates are being arranged between the Commonwealth and .State savings hanks and private institutions, and this will he supplemented by legislation giving relief to mortgagors. The plan agreed upon will reduce the deficit for 1931-32 from £39,000,000 to £14,(150,000.

A committee, including Mr Lang, was funned by the conference to try to induce New South Wales to rejoin the Loan Council, in order that the present litigation now pending, for sums defaulted on by New South Wales in interest payments, may be withdrawn.