AUSTRALIAN FINANCES.

New Zealand Herald, Volume LXVIII, Issue 20901, 17 June 1931, Page 11

AUSTRALIAN FINANCES.

RETRENCHMENT PLANS. programme' completed. ATTITUDE OF MR. .y LANG. A long statement embodying the proposals adopted by the Premiers'/Conference in Melbourne was issued by the Prime Minister of the Commonwealth, Mr. J. H. Scullin, at.the final meeting of the conference last Thursday. The concluding resolution was that emergency sessions of all Parliaments should be summoned to pass the necessary legislation. Mr. Scullin said the total deficit of the seven' Australian Governments would be £31,000,000 for the present financial year. The Governments were now going behind at the rate of £40,000,000 per. annum, in spite of reductions of expenditure amounting to £11,000,000 per annum since 1929-30. The deficits had been met hitherto by bank overdrafts. The Commonwealth Bank had notified the Governments that the limit to. that process had been reached. Early in July the Governments would have insufficient means to ' meet their obligations. The conference had, therefore, adopted a plan which combined all possible remedies in such a way that the burden would fall as equally as possible on everyone, and no considerable section of the people would be left in a privileged position. An Indivisible Plan. " The. plan has been' adopted by the conference as a whole, each part of which is accepted on the understanding that all the other parts are equally and simultaneously put into operation," said Mr. Scullin. It embraces the following measures:— • (1) A reduction of 20 per cent, in all adjustable Government expenditure, as compared with the year ended June 30, 1930, including all emoluments, wages, .salaries, and pensions paid by the Governments, whether fixed by statute or otherwise, such reductions to be equitably effected. (2) Conversion of the internal debts of the Governments on the basis of 22j per cent, reduction of interest.' (3) The securing of additional.revenue by taxation, both Commonwealth and State.

(4) A reduction of bank and savings bank rates of interest on deposits and advances.

(5) Relief in respect to private mortgages.

" These proposals require the greatest effort in economy and taxation which the conference considers it safe to attempt," Mr. Scullin added. "The effect.will be still to have a gap of from £13,000,000 to £15,000,000 to be covered for a time by borrowing." Interest on Mortgages.

Most of . these proposals have already been explained in detail. The provision of relief for mortgagors was referred to a sub-commit tee, which earlier in the week presented the draft of a. bill providing that any mortgagor might apply by notice to the Court at any time within 12 months of the commencement of the Act for a reduction'of the interest payable. Unless the mortgagee satisfied the Court that there were special circumstances the Court would make an order for the reduction of the rate of interest at tho rate of 22j per..cent. Every order would apply only to interest accruing due after the commencement of the. Act, and would continue in force during, the continuance of the mortgage., unless, the Court, for special reasons, otherwise directed. There was some discussion of relief other than by reduction of interest, on the lines of the recent legislation in New Zealand. However, the conference adopted the committee's recommendations, with an addition that interest, should not be reduced below 5 per cent. Mr. Lang's Reservation. The proceedings of the conference last week were marked on several occasions by speeches bv Mr. J- T. Lang, Premier of New South Wales, in which he bluntly declared that, he did not agree with the plan in all its details. His adhesion to the decisive resolution was. qualified by « reservation that the Government of New South Wales would not proceed with the other economy measures "unless and until the conversion loan shall have been successfully and effectively carried out." Mr. Scullin said that rather than break up the conference and not have all the Governments at one with the plan, he felt members meet the difficulty raised by Mr. Lang. What they proposed to do would occupy five or six- weeks. After further discussion Mr. Lang said that. s6 long as the official, reports incorporated his reservation he would agree to the motion.

Mr. Scullin: Then I declare the motion agreed to. At the closing session on the following day the conference agreed, on Mr. Scullin's motion,/to the appointment of a committee comprising Mr. ' Scullin,'. Mr. Lang and Mr. Hill, Premier of South Australia, to go into the matter of overseas interest due by New South Wales and the position of the Government Savings J£anfc "to work out, if possible, a formula or an agreement whi'ch may have to be submitted to a. later Premiers' conference."