LANG'S DEBTS.

New Zealand Herald, Volume LXIX, Issue 21112, 20 February 1932, Page 9

LANG'S DEBTS.

FEDERAL ACTION. DRASTIG LEGISLATION. SEIZING STATE TAXES. [ALL REVENUE CLAIMED. / POWERS UNDER BILL. By Telegraph—Pre*? Association—Copyright. (Receiver] February 10. 5.5 p.!!!.) CANBERRA, Feb. 19. 'A bill to compel Mr. J. T. Lang, Premier of New South Wales, to comply with the provisions of the financial agreement and to honour his obligations to the Commonwealth was introduced in the Federal Parliament last, evening. It provides that the payment, of revenue due to the State must be made by the taxpayer through the Commonwealth instead of the State. Favment to the Commonwealth would lave the effect of a discharge to the taxpayer of his liability to the State, but payment to the -State would not discharge / that liability. Penalties are proposed for payment by g taxpayer otherwise than to the Commonwealth, anr ' on a State Minister, officer or employee for attempting to pecure payment to the State. The bill contains a provision for the enforcement of payment to the Commonwealth of the State revenues, and power is conferred on the Commonwealth to retain loan moneys borrowed for the State by decision of tho Loan Council. The banks can be required under the bill to hand over to the Commonwealth moneys they hold or receive on behalf of the State. Averting Disaster and Disgrace. Offences against the bill would bp punishable. Where summary proceedings are taken the maximum penalty fixed in the measure is a fine of £IOO, or imprisonment for six months, and where the ' offender is prosecuted on indictment, the maximum penalty proposed is a fine of £SOO, or imprisonment for two years or both. In moving the' second reading of the bill, Mr. J. A. Lyons, Prime Minister, said the measure, was of a type never contemplated because it. had been believed that all the Australian Governments could be relied upon to stand up to their obligations. The whole financial structure was built up by financial agreement, and would be undermined if it became possible for a State to refuse to meet the obligations it had solemnly entered into at any time. A dishonourable Government could bring disaster and disgrace upon the State. In the interests of the whole people of Australia it was desirable that this should be obviated. Obligations Must be Met. Mr. Lyons added: "We are forced to the conclusion that Mr. Lang will ignore his obligations as long as the Commonwealth is prepared to shoulder them, and unless the State is checked now it will let the rest of Australia carry its burden. ~-„l"lnthe interests of national finance, find of the credit of Australia, Mr. Lang ''must be made to play the game with the other Governments. He must be compelled to conform to his undertakings under the Premiers' Plan, and he must be forced to meet his public obligations." Mr. Lyons said the total amount of the default of New South Wales in respect of interest due this year was £1,169,735. This included the exchange on the necessary remittances and covered the whole of the-overseas interest due by the State since February 1. Complete Surprise to House. ' The bill came as a complete surprise to the House. ' The Beasley group attempted to stonewall its introduction when Mr. Lyons had moved the adjournment of the debate on the Address-in-ißeplv. This led to the first division in the Sew Parliament, the Government winning t>y 60 votes to 6. Opponents of the bill were the five toembers of the Beasley section, and Mr. E. J. Holloway, formerly Assistant Minister of Industry. Unprecedented Nature of Measure. ' As the Federal Labour Party as well as the Country Party give the measure, iwhich is entitled the Financial Agreement Enforcement Bill, the fullest support its immediate passage is assured. Any attempt at obstruction probably would only be supported by the Beasley group. However, the Government realises that this by no means spells a simple ending of the difficulties, legal and constitutional, ."■which must be faced. For the first time jj since the federation the bill claims the right to exercise powers by the Com,we?lth which never previously were regarded as coming within the ambit of Federal administration. Ministerialists welcome the measure, fchiefly as an indication that the Federal Government 'is determined to act firmly in /order to end the present situation in relation to the Commonwealth and New South Wales. .-GOVERNMENTS' DEBTS. 1 LOANS TO JANUARY 6. LARGE TOTAL INVOLVED. I SYDNEY. Feb. 19. The Governments of Australia —Commonwealth and States—up to January 6 last had borrowed from the Commonwealth Bank and through the Commonwealth Bank from the trading banks in Australia, i °n short-term securities, £41,001,000. The Governments also owed Australian banks * n London and tho Westminster Bank £27,825,000. Gf that amount £31,751,000 was advanced between December 31, 1930, January 28, 1932. The amount Mich New South W 7 ales obtained from the banks yto December 31 last was A message from Canberra states that Prime Minister, Mr. Lyons, in the - use of Representatives, indicated that ]jfP ne °f 'he objects of the mission of Mr. 6. M: Bruce to London would be. to seek from the oversea interest burden*