HEAVY BURDEN ON AUSTRALIA

Southland Times, Issue 23680, 1 December 1938, Page 5

HEAVY BURDEN ON AUSTRALIA

EXPANDED DEFENCE PROGRAMME LONG-RANGE GUNS ALONG EAST COAST (United Press Assn.—Telegraph Copyright) SYDNEY, November 30. The problem of finding money to finance the expanded defence programme is causing the Federal Cabinet increasing concern, says the Canberra correspondent of The Sydney Morning Herald. Most of the Ministers are now reconciled to the fact that heavy borrowing will have to be undertaken to finance next year’s programme, and it is even likely that borrowing on the London market will be resumed. Salient. features of the new programme, it is understood, will be. the provision of a line of batteries of highpowered, long-range coastal guns along the east coast and the creation of a military force and air force strong enough to deal with any landing force. The Minister of Defence (Mr G. A. Street), giving details of defence .expansion in the House of Representatives, stated that plans had been made to prepare merchant vessels on the Australian register for the mounting of defensive armament

EXTRA BORROWING BY BRITAIN

NO FIGURES MENTIONED BY CHANCELLOR

(British Official Wireless) RUGBY, November 29. In view of the extra expenditure on defence now contemplated, the Chancellor of the Exchequer (Sir John Simon) has decided that some increase in the limit of £400,000,000 authorized by the Defence Loans Act 1936 for borrowing for the rearmament pro- . gramme will be necessary. For some' time the suggestion has been, made in both parliamentary and financial circles that with a view to allaying anxiety on the part of industry and trade about the future incidence of the cost of rearmament the Chancellor should make some statement in anticipation of the Budget, and it was in reply to a question on these lines that Sir John Simon announced today that he had come to the conclusion that increased borrowing powers would be needed,, and it was his intention at an appropriate time next year to ask power to pass legislation for this purpose. Emphasizing that it would be neither desirable nor practicable to depart from the rule of providing in anticipation the estimates or provisions of the Budget, the Chancellor said he recognized that considerable increases in the »defence expenditure which had already been'announced were brought to the forefront by the question how they should be met. The Act of 1936 had authorized borrowing up to £400,000,000, and by the end of the present financial year they would have met the cost of rearmament out of borrowed money to the extent of about £280,000,000. About £20,000,000 therefore remain, so that the problem of authority to borrow was not urgent, but he thought at the time the new commitments had been incurred they should prepare a plan in advance. Sir John added that it would be impossible to mention figures in anticipation of the new Bill, but he made the statement to remove uncertainty as far as he could. •