DEPRESSED AUSTRALIA.

New Zealand Herald, Volume LXVIII, Issue 20792, 7 February 1931, Page 11

DEPRESSED AUSTRALIA.

A GUIDING HAND WANTED.

PREMIERS IN CONFERENCE. SCULLIN REVIEWS FINANCE. WORSE POSITION FEARED. By Telegraph—Press Association—Copyright. (Received February f,. 11.is p.m.) SYDNEY, Feb. G. Although Australians have been diverted temporarily from their troubles hy the deplorablo earthquake in the Dominion, they are again beginning to wonder when the heavy pall of depression which hangs over the Commonwealth will show signs of lifting. Every Government and every Stato is looking to the Commonwealth Government for a lead. Every citizen in every State awaits anxiously some tangible pronouncements which will afford work for bread winners and relief from the intolerable economic depression which threatens to develop into something moro sinister. Action l>y the Commonwealth Government in the direction desired began early this week a',,r Canberra, with the conference between the Prime "Minister, Mr. J. H. Scullin, the Federal Treasurer, Mr. E. G. Theodore, and the chairman of the Commonwealth Bank, Sir Robert Gibson. Their conversations were concluded yesterday and now the conference of the various Stato Premiers and Treasurers has begun at the Federal capital to consider the three-years' plan for the financial rehabilitation of the Commonwealth. Reduced Wages Opposed. Reports arriving from Canberra indicate that there is already a hitch, as hoth Mr. Scullin and Mr. Lang declare that they will not consider any plan which involves a reduction of wages or the standard of living. The Prime Minister, addressing the conference on national finances, reviewed the heavy fall in exports and tho terrific growth of unemployment. lie said the Governments of the States and the Com monwealth were faced with the task of meeting a very serious budgetary position. Ho estimated that the Commonwealth's deficit in 1930-31 would bo £10,000,000 and those of tho States £5.000,000. He said ho feared that the position in the following year, on tho basis of tho present conditions, would be even worse.

Mr. Scullin emphasised the fact that although tho Commonwealth Government was a party to the "Niemeye>- agreement," by which the Budgets must bo balanced, it had been impossible to honour tho agreement, owing to the immense decline in customs and excise revenue, and also that from other sources.

"The task to which we - set ourselves was too great for immediate accomplishment," said Mr. Scullin.

The Federal Government's commitments for the year were as follows:—lnterest and sinking fund, £23,000,000; exchange, £3,000,000; war, invalid, and old ago pensions, £20,000,000; defence. £3,000,000; payments to the States, £12,500,000; public utilities, £11,000,000: ordinary departments and miscellaneous services, £6,500,000. Tho total was £79,000,000.

Turning to the Government's loan debts, he said the short term indebtedness of the Commonwealth and the States by way of overdrafts and Treasury bills at the end of this month was estimated at £55,500,000, of which.£3B,ooo,ooo was owed in London and the remainder in Australia. £10,000,000 In Exchange. At the present rate of exchange the problem of meeting overseas liabilities involved the payment of an extra £10,000,030. Mr. Scullin urged the conference to turn its attention to a reduction in the rate of interest on future loans. He added that--the essential need at the moment was a revival in industry, in order to provide work, which would naturally lighten the task of restoring the Budget equilibrium.

Shortly after the conference had got down to business the Prime Minister astonished the delegates by declaring that the report of the committee of financial experts which drew up the plan for submission to the conference had no right to mako recommendations, but was merely required to collect data and statistics for the information of those present.

BURDEN OF DEBTS. THREE YEARS' OBLIGATIONS. TOTAL OF £374,000,000. (Received February 7, 12.45 a.m.) SYDNEY, Feb. 6. The following is an official summary of the Commonwealth and State financial obligations, totalling £374,000,000, during the next three years Commonwealth and States' maturing debts, £160,000,000. Treasury bills, London, £10,000,000. Short-term indebtedness, London, £30,000,000. Short-term debts, Australia, £9,000,000. Interest bill, London, for three years, £82,000,800. Interest bill, Australia, same period £82,000,200. Total, £374,000,000. Well-informed circles say it will be impossible to repay the loans out of the funds derived from additional taxation, therefore further borrowing will be necessary, which will only bo possible by tho restoration of Australia's credit aud lower rates of interest.