POSITION IN AUSTRALIA.

Otago Witness, Issue 4032, 23 June 1931, Page 25

POSITION IN AUSTRALIA.

LOAN OF £15,000,000 IN GOLD. SYDNEY, June 19. A group of financiers in London, through a Sydney agency, is reported to have offered a £15,000,000 loan in gold for a long term at market interest to the Commonwealth Government, the bullion to be paid for by bonds with a currency of 40 years at 4 per cent. The Prime Minister declined to make any comment, but he displays no enthusiasm about the offer. Some of his colleagues express the opinion that the lenders must be very well disposed to Australia, having regard to her financial plight and the more profitable field else.where. THE ECONOMY PLAN. CANBERRA, June 16. The Prime Minister (Mr J. H. Scullin) has written to Mr E. J. Holloway, saying: “The economies to which you abject are quite as distasteful to every other member of Parliament, but we Have to recognise that they are unavoidable. The Treasury figures disclose that unless we take steps to meet the position the Commonwealth will not be able to pay 12s in the £. Therefore it is a question of arithmetic, not of argument, since default will mean that pensioners and public servants, with whom you so much sympathise, will receive nothing at all. We cannot escape the grim fact that reductions are inevitable.” Mr E. J. Holloway, who was assistant Minister of Industry in the Federal Ministry, resigned, being strongly opposed to the Premiers’ Conference economy plan. He wrote a letter to the Prime Minister saying that he had no sympathy with the reduction in pensions, and he believes the only way to revive the Australian position was by the issue of fresh credit through the National Bank.

OBLIGATIONS IN LONDON. CANBERRA, June 17. A Bill authorising the export of £5,000,000 worth of gold to meet the Commonwealth Treasury Bills which are due on June 30 was passed in the House of Representatives. The Treasurer (Mr E- G. Theodore) said that there was no alternative but default. The Opposition assented to the measure, which reduces the statutory reserve of gold from a minimum of 25 per cent, to 15 per cent. •Since the Scullin Government came into office in October, 1929, about £31,735,000 in gold has • been shipped abroad. TWENTY PER CENT. CUT. CANBERRA, June 18. The Senate passed the Bill authorising the shipment of £5,000,000 worth of gold. i - In the House of Representatives, Ain E. G. Theodore (Treasurer) announced that legislation would be introduced immediately to increase the sales tax from to 5 per cent., and the primage duty from 4to 10 per cent. Income . tax would also be increased. It was thus hoped to reduce the deficit from £20,000,000 to £4,500,000. Twenty per cent, cuts would also be made without delay in public servants’ salaries and ex-soldiers’ pensions, but due consideration would be given to indigent cases. Pensions would in future be denied to the widows of soldiers who remarried and to the children of such remarriages, NEW SOUTH WALES BUDGET. SYDNEY, June 17. The New South Wales Government’s Budget was delivered by Mr Lang (Premier and Treasurer), who declared that the year’s deficit amounted to £8,731,000, of which the railways were responsible for £4,290,000. He said that the accumulated deficit was mainly a legacy from his predecessors. Mr T. R. Bavin (Leader of the Opposition) : You are always making excuses. Mr Lang: You made them for three years. Continuing, Mr Lang said that the receipts from the unemployment tax by June 30 would total £4,400,000. The receipts from the family endowment tax would be insufficient for the purpose, and it might be necessary to increase it from 1 per cent, to 2 per cent. Mr Lang emphasised that the State finances must be put on a sound basis, and as it was doubtful whether loan moneys could be obtained in future it might be necessary to complete the works now under construction out of revenue. He referred to the action of the Premiers’ Conference in deciding to reduce interest rates as a step in the right direction, and said he had been severely criticised »in all quarters for advocating this very thing. He announced that the estimates for the coming year would include provision for the -payment of all interest. SYDNEY, June 18. Discussing the Budget, the Leader of the Opposition (Mr T. R. Bavin) said that the deficit had been increased by the introduction of party policy legislation, such as the 44-hour week. He added that the Opposition would support the Government if it carried out the policy adopted at the Premiers’ Conference and abandoned the Lang plan.

- SECOND READING DEBATE. CANBERRA, June 18. The Prime Minister (Mr J. H. Soul Hn), in moving the second reading of the

Bill to approve the Premiers’ Conference financial agreement, which covers the conversion plan, reviewed the whole history of Australian indebtedness. He said that Australia had had no credit in London since September last, and whatever new expenditure had arisen had been caused by world conditions. For example, the adverse exchange was costing £10,000,000 per year. The unemployed in Australia now numbered 360,000, the cost of whose sustenance and relief was £9(000,000 per year, while if no action was taken to cope with the drift this cost would be swollen to £13,000,000 per year. The debate has not been concluded. APPROVED BY LABOUR PARTY. CANBERRA, June 19. The Federal Executive of the Australian Labour Party, which has held a series of meetings, has concluded its deliberations on the Premiers’ Conference plan and it was resolved to approve th«» action of the Prime Minister and Mt Theodore in giving parliamentary effect thereto. At the same time the executive expressed the strongest objection to thprinciple of reducing wages, pensions, and social services. The executive pointed out that as the Government’s monetary policy had been thwarted by the banks and » reactionary Senate the only alternativeto the present plan was a Nationalis* Government, which would give the workeron infinitely worse deal. It was there fore of the greatest importance that the Labour Government should remain in office as an election at the present moment would be dangerous to the workers’ in te rests.

FINANCIAL AID FOR STATES. CANBERRA, June 18. In a report presented to the House of Representatives the Public Accounts Committee recommended that South Australia had a reasonable claim for a grant of £1,000,000 from the Commonwealth for 1931-32, and that no increased financial assistance to Tasmania would .be justified at present. SYDNEY STOCK EXCHANGE. SYDNEY, June 18. Business on the Stock Exchange has been restricted for the past few days, and a markedly cautious attitude has been adopted. Commonwealth bonds are displaying a tendency to drift, investors being disinclined to operate in the absence of conversion loan details. Banks have reacted from the recently improved levels, but most of the better class industrial shares continue to be steady.

HUGE DEFICIT ON RAILWAYS. SYDNEY, June 19. The Premier (Mr J. T. Lang) made a forecast in the Assembly when he gave his second reading speech on the Trans port Bill. He expressed the opinion that the Act would in a great measure remedy the position into which the finances of the State had drifted. Drastic steps were needed, he pointed out, to balance the Budget of the railways, but he was confident that when the whole of the State’s transport services were co-ordinated the huge deficits in . this department would be eliminated. He added that the owners of private cars would in no way be affected by the Bill. UPPER HUNTER BY-ELECTION. . SYDNEY, June 17. The Upper Hunter by-electibn resulted in a win for Mr Malcolm Brown flndependent Country Party). Mr A. M'Mullen (Nationalist) polled over 1100 more primary votes that Mr Brown, but the latter secured 90 per cent, of the second preferences of the Labour candidate (Mr Forsyth). The by-election was the result of the death of Mr Cameron (Nationalist). The final figures were: Brown, 6922; M’Mullen, 5494.

CONVERSION OF PUBLIC. DEBT INSURANCE OFFICES TO CO-OPERATE. Mr George Bruce Smith, of Sydney, general manager of the Australian Provincial Assurance Association, Ltd., who is at present in Dunedin, has received advice that the. Life Offices’ Association of Australia has promised co-operation in the scheme formulated recently for the conversion of the internal public debt of the Commonwealth, provided all other portions of the scheme are carried out simultaneously and in their entirety, Mr Bruce Smith told our representative on Wednesday that the association, at a meeting held on June 8. had passed the following resolution, a copy of which has been forwarded to the Loan Council :— “ That the life assurance offices are prepared to co-operate in the scheme for the conversion of the public debt put forward by the Committee of Economists and Under-treasurers in its report of May 23, 1931, on condition that all the other portions of the scheme in their entirety are carried into effect simultaneously as indicated broadly in the re-, port.” The seven offices comprising the as sociation controlled assets totalling £108,866,928, of which £55,913,722, or 51.3 per cent., took the form of Govern-

ment securities. The details of Govern ment securities held by these offices were as follow: —Australian Mutual Provident Society, £43,882,923; Mutual Life and Citizens’ Assurance Co., Ltd., £10,337,958; Assurance and Thrift Association, Ltd, £12,823; Australian Metropolitan Life Assurance Company, Ltd., £361,662; Australian Provincial Assurance Association, Ltd., £1,032,683; Commonwealth Life (Amalgamated) Assurance, Ltd., £159,722; Provident Life Assurance Company, £125,951. Mr Bruce Smith pointed out that if the association’s offer was accepted the companies’ securities, which were at pres ent drawing from 5J to 6 per cent, interest, would, on conversion in accord ance with the new scheme, draw not more than 4 per cent. This meant, in effect, that the offices mentioned would be making a gift to the Commonwealth Government of between £1,250.000 and £1,500,000 per annum. THE A.M.P. HOLDINGS. The investments by the Australian ' Mutual Provident Society in Australian Government bonds are very much smaller than the figure mentioned by Mr G. Bruce Smith. The latest balance sheet usual, exhibits its investments in detail, issued by the A.M.P. Society, which, as shows that the Australian Government securities held by it do not amount to £21,000,000.