CLASH OF INTERESTS

Otago Daily Times, Issue 24685, 14 August 1941, Page 8

CLASH OF INTERESTS

AUSTRALIAN PARLIAMENTS FEDERAL AND STATE SYDNEY, Aug. 13. The fact that the Commonwealth has taken far-reaching powers since the outbreak of war has set a large section of the community wondering whether, when the war is finished, the' agitation should be revived for complete abolition of the Australian States and their Parliaments. The latest instance of the clashing between Federal and State political interests is provided in New South Wales, where the Leader of the Labour Government (Mr W. J. McKell) is compelled to admit his inability to carry out the election 1 programme because the Federal Loan Council, at its recent meeting, curtailed his borrowings by £3,000,000. One of Mr McKell’s most attractive election promises was the abolition of the wages tax, from which previous State Governments had netted about £4,000,000 a year. Mr McKell, who now finds himself in an embarrassing position, confessed to-night that his Budget proposals would have to be recast, involving abandonment of the contemplated public works. Mr McKell complains that the dice was loaded against New South Wales at the Loan Council owing to the inequality of the voting power of the States and the Commonwealth. The Federal Treasurer (Mr A. W. Fadden), while sympathising with Mr McKell, said that if the Loan Council had fully acceded to all the State Governments' requests, then the borrowing required would roughly be £40,000,000 instead of £20,000,000, which could only haye been raised by expansion of credit. Such a sum would have been spent in direct competition with the Commonwealth. whose resources of men and material were urgently required for the war.