FEDERAL REVENUE

Southland Times, Issue 21178, 3 September 1930, Page 5

FEDERAL REVENUE

ALARMING DECREASE LOWER WAGES BELIEVED INEVITABLE ATTITUDE OF UNIONISTS (United Press Assn.—By Telegraph—Copyright.) Canberra, September 2. The Federal revenue for July and August shows an alarming decrease, which if continued for the remainder of the financial year would mean a Budget deficit of £9,000,000. The Federal Cabinet will hold a meeting to consider the situation, and it is expected that a special session of Ihe Federal Parliament will bo convened early in October to deal with the finances. In Federal circles a reduction in wages is regarded as inevitable. It is stated that the pledge given by the Government at the Melbourne Conference to balance the Budget may lead to the resignation of Mr J. A. Beasley, Assistant Minister of Labour and Industry, from the Ministry, as the Australian Labour and Industrial section of the Labour Party has called upon Federal Ministers to repudiate the conference understanding. A message from Melbourne states that Sir Otto Niemeyer and Mr Kershaw, of the Bank of England, had an interview with the president of the Australasian Council of Trade Unions, Mr Duggan, and other representatives with the object of discussing the general effects of the financial proposals and the steps it was proposed to take to meet Australia’s obligations. The unionists said they resented strongly attacks that were being made on the standards of living of the workers. They urged a reduction in interest both on deposits and advances together with a reduction of interest on external loans and rates of exchange, which would bring about a financial saving without adversely affecting wage standards. Sir Otto Niemeyer suggested a conference between representatives of the unions and employers with a view to agreeing upon a percentage reduction in wages and prices. Sir Otto Niemeyer and Mr Kershaw leave Sydney on Thursday for New Zealand. “EVERYONE’S PROBLEM” BURDEN MUST BE SHARED BY ALL. REPUDIATION PROPOSAL DEPRECATED. (Rec. 5.5 p.m.) Sydney, September 2. Appealing to the Constitutional Association Mr E. 11. I'rirrar, the State Minister of Labour, reviewed the steps being taken to deal with the existing depression. He said that people were realizing that this was not a Government problem alone; it was everyone’s problem. All must face the position and take a share of the burden. Some people talked of repudiation, but tins would mean that the small men would suffer mostly, not the wealthy capitalists. The Premiers’ Conference decisions at Melbourne practically ratified the proposals formulated by the Bavin Government months ago to deal with the economic situation. With national co-opera-tion Australia should come through the troublous times with advantage, and steer clear of pitfalls in the future. Mr Makin, Speaker of the House of Representatives, speaking at Broken Hill, declared that Australia could not seek to evade her responsibilities by repudiation—■ an infamous policy worthy only of the strongest condemnation. The financial crisis was not wholly responsible for the present depression, which was partly due to the fact that public men and leaders of industry and commerce had been slow to recognize the change from the old industrial system to the new, and they had been caught up unprepared for the transition period. In the meantime the Trades Hall is militant, and is proceeding with a campaign for the repudiation of war debts and organizing a mass meeting at the Town Hall on Monday to discuss this and other subjects. “HAVE TO GET DOWN TO IT” SIR OTTO NIEMEYER’S OPINIONS. (Rec. 9.20 p.m.) Sydney, September 2. Sir Otto Niemeyer arrived in Sydney from Adelaide and Melbourne where he had a parting conference with Premiers and Treasurers on finance. A similar talk takes place with Mr Bavin, the Premier, and Mr Stevens, the Treasurer, of New South Wales. All that Sir Otto Niemeyer would say to interviewers to-day was that Australia would get through, but would have to get down to it. SHORT SESSION OF N.S.W. PARLIAMENT. (Rec. 11.55 p.m.) Sydney, September 2. At a meeting of the State Cabinet it was decided to begin a short session of the New South Wales Parliament on September 16 when a financial statement will be presented as a result of Sir Otto Niemeyer’s visit. The State elections will be held on October 25 or November 1. AUSTRALIA’S PROBLEM S REPUDIATION OF WAR DEBTS. PROFESSOR GREGORY’S OPINION. (Per United Press Association.) Wellington, September 2. Professor T. E. Gregory arrived this morning from Sydney as the guest of the Government of the Dominion. He came straight on from Melbourne via Sydney without delay as his time is short. Professor Gregory has been accompanying Sir Otto Niemeyer of the Bank of England in his investigations into the Australian Federal and State Government’s financial affairs. When seen to-day Professor Gregory was not prepared to discuss anything at present beyond generalities when pressed for his personal opinion of the proposal of a section of Australian Labour politicians that the war debts of the Commonwealth should be repudiated. “Any proposal of a repudiatory character,” said Professor Gregory, “would be disastrous for Australia. One immediate result would be litigation in the Australian courts. Such action, if it assumed the shadow of being given effect to, would be the first time on record any first class British Dominion had gone back on its obligations. No distinction can be drawn between repudiation of external debts and repudiation of internal debts. All creditors must be treated alike whether they are in England or Australia. One can’t pick and choose in this way. If Australian holders of Government stocks were to continue to receive their interest it is practically certain that British holders of such stocks would seek the aid of the Australian courts in safeguarding their rights.” But' there was another aspect of repudiation to which its proposers had not given sufficient thought or did not intend to take into consideration, he continued, and that was the effect of repudiation on Australia itself. Australian loan debt is very largely held in Australia itself and the immediate and inevitable consequence of repudiation would be disastrous.

“I think it would produce a very severe banking panic,” continued Professor Gregory. “Holdings of the Australian Government obligations include banks, savings banks, life assurance societies and friendly societies. Property would depreciate in value in common with the depreciation in value of securities generally. Australia

can repudiate if it wants to, but in that event it cannot hope to raise fresh loans immediately if it requires a fresh loan and then it better not repudiate or talk of repudiation. “Australia must not blink the facts,” said Professor Gregory, in conclusion. "It must square up to the facts and the sooner it does so the better it will bo for everyone.” He saw danger in any piecemeal action. What had to be done should be done in concert. As he saw it Australia was in for a trying and difficult twelve months. The aftermath would depend upon the world situation which no one could control. He did not minimize the uneasiness of the financial mind in Australia and in London to be attributed to suggestions of repudiation and inflations. The impression made outside the Commonwealth by such suggestions was most unfortunate for Australian working people stood to suffer severely by inflation because they would be paid in money, the value of which would be falling. They would be taxed without knowing they were being taxed. If Australia hoped to again approach the London money market for loans it must be very careful of doing anything that will leave a lasting unfavourable impression on that market.

Professor Gregory is staying in Wellington'awaiting the arrival of Sir Otto Niemeyer. He will visit New York before returning to London, intending to pursue some economic studies in the United States.