AUSTRALIAN LOANS.

New Zealand Herald, Volume LXVI, Issue 20333, 14 August 1929, Page 9

AUSTRALIAN LOANS.

FURTHER CURTAILMENT.:

EMERGENCY CONFERENCE.

TOTAL OF £28,000,000 FOR YEAR.

A special meeting of the Federal Loan Council of Australia was-held in Sydney last week. The Federal' Treasurer, Dr. Earle Page, presided, and all the Stalo Governments were represented. The Premier of South Australia, Mr. Butler, travelled to Sydney for the purpose of attending the meeting, but ho developed a severe attack of Influenza, and was admitted to the Jenncv Hospital. During the deliberations, the chairman visited the hospital to confer with him, the meeting being adjourned until Mr. Butler's attitude had been made known.

The proceedings, of course, were held in private, and at tho close of the meeting tho following statement was issued:—"The Australian Loan Council, at its meeting today, discussed tho financial position, and in view of the information available fince the last meeting it decided that the curtailed loan programme of the various Australian Governments be still further reduced by 20 per cent. Every Government was represented."

A meeting of the council, held at Canberra last May decided, the Sydney Morning Herald stales, to confine the borrowing during 1929-30 to Tho latest decision reduces tho amount to £28,000.000. The decision was mentioned in a public speech later in tho day by Mr. Stevens, the New South Wales Treasurer, and one of the State's representatives at the conference. He said tho curtailment of loan expenditure by the Australian Governments would undoubtedly bring with it the difficulties inherently associated with deflation. But in view of the position so clearly indicated the curtailment of expenditure decided upon was inescapable.

Mr. Stevens said that there was no doubt, that Australian credit had suffered recently by reason of a good deal of uninformed criticism. "We must look the facts in the face," he added, "and admit that some of the criticism of the loan policy of the Commonwealth and the various State Governments has been well founded; and the best answer we can give to the oversea investor is that v.e are keeping within reasonable limits in our loan expenditures. "Taking the debt of the Commonwealth and of all the States combined, over a seven-year period (1922-1928), -we find (here has been an increase from £884,000,000 to £1,095,000,000, or in terms of debt per head of population, from £159 to £174. "As against this, it should not be forgotten that, for the redemption of the debt of both Commonwealth and States, an annual payment is being made to a sinking fund, which .will redeem the whole', of the. existing debt within tho next 58 years, and makes provision for the liquidation of any new loans for periods ranging from 30 to 53 yeais fiom tins dates of flotation. The amount set anart annually by the Commonwealth and the States under tho ternw> of this meat is a little more than £7.000,000. Compounded at the present rates, this will amount in ten years to no less than £100,000,000. "It should not be overlooked, further, that the great bulk of interest on the capital debt of the States particularly is borne from the revenues; earned by the enterprises m which the debt has been used."