AUSTRALIAN FINANCES.

New Zealand Herald, Volume LXVIII, Issue 20793, 9 February 1931, Page 16

AUSTRALIAN FINANCES.

MR. LANG OFFERS "CURE."

PRESENT SYSTEM ATTACKED.

SALARIES TO BE RESTORED. [from oue own correspondent.] SYDNEY, Jan. 29. Tho .Premier of New South Wales, Mr. J. T. Lang, is not a man who seeks notoriety, but, all tho samo, ho usually achieves it. One of the most outstanding trails in Mr. Lang's character is that of suspicion. He seems to distrust everyone but himself, and, strange to say, all but a few of his followers distrust him. Ho prefers to play the part of " tho man who stood alone." When he is in office lie seldom makes a public announcement, leaving his bullets to bo fired by one or other of his faithful followers in the Cabinet. His bitter attack on financial institutions at tho opening of tho Labour Party's country conference the other day, therefore, came as a surprise—not the actual attack, but tho fact that he made it openly. " Unless within the next three or four months tho Governments havo found a means of breaking through tho financial net that has enmeshed them, every Government will be broken," said Mr. Lang. " They have talked for years, and, meanwhile, tho people havo suffered and- are still suffering. This Government of New South Wales is not a Government of cowardly croakers; it is a Government that will not wring its hands and say that the position is hopeless. We will try to find a way out or \ve will try to inako a way out. , Fate of Industry.

" This conference has met at a time when the position of tho State is the most critical in its history. Every industry that we have is languishing, and we aro compelled to realise that whet? the financial interests go after their pound of flesh they make no discrimination between tho primary and the secondary industries. It proves to us that, while the rural question needs expert handling, tho fate of the industry as a whole is completely wrapped up with tho fortunes of tho secondary industries. Both rise and fall together. " During the last general election campaign I said that if the people did, not break' the power of tho financial institutions it would not be long before those institutions broke them. The position faces us more sternly to-day than it did three months ago. Twelve months ago Australia was due to pay £36,000,000 a year in interest to oversea lenders. Today, although she has not borrowed one penny piece more, that interest bill has risen to £46,000,000, with every prospect of it being increased to £50,000,000, nearly £lO per head of population. This is the result of what high finance terms exchange rates.

Another Form of Currency. " The old system of finance has failed to meet the present situation, and everywhere there are signs that the whole world is realising this. O/ily a few days ago the newspapers announced that Mr. Reginald McKenna, one of the most alert brains among the European financiers, stated that the cause of the depression was chiefly under-consumption and the failure of the gold standard. That has been the contention of the New South Wales Labour Party ever since the depression began. We agree with Mr. Mcl£enna that salvation can come only through the adoption of some other form of currency. Sooner or later this problem must be faced by the Governments of Australia. It certainly should bo met by Labour Governments. Between this and then, however, reconstruction must be faced. The cure does not lie merely in reducing wages. The Nationalist Government proved that. It reduced the workers' pay all round, but -unemployment continued to increase." „

It is of particular interest to note that the Premiers of the Commonwealth and the States will meet in conference next week, when further consideraton will be given to the finances of the Commonwealth. More will then be heard of the three year plan, a. hint of which was given by Mr. Sculliu in Melbourne soon after his return from tho Imperial Conference. It is now generally recognised that Australia cannot do all that is necessary within a year—cannot possibly balance its budgets within that time. While the ( budgets are unbalanced, it will be most 'difficult to restore confidence, but if a plan can bo drawn up by which the position can be rectified within three years the outlook will be considerably brighter than it is to-day. There has been a suggestion that the scheme should be left to a committee of experts on which each Government would have direct representation. The suggestion that the members of this committee

" need not necessarily bo politicians " is hopeful, to say tho least of it. Such a committee would devise a plan which all tho Governments would have to adhere to strictly. Here again there is a distinct possibility that Mr. Lang >vill bo the stumbling block. He has not yet made up his mind whether he will attend the conference, and without him it \yill not be possible to do anything useful.