COMMONWEALTH FINANCE.

Colonist, Volume LXI, Issue 14976, 25 January 1919, Page 5

COMMONWEALTH FINANCE.

CONFERENCE OF STATE AND

FEDERAL MINISTERS

A SERIOUS POSITION

Sydney, Jan. 23. At the conference of Federal and State Ministers, Mr Watt dealt with the financial position. He said the outlook for the Commonwealth w asserious. He foreshadowed reduced revenue from taxation, while the expenses of the Australian army had kept up, and repatriation would cost scores of millions. In view of these factors the Commonwealth proposed to diminish the present payment of 25s per head of the surplus revenue to" the States progressively by 2s 6d yearly, till it was IDs per head in 1926. He added that sooner or later the States would have to do without any Commonwealth help. The reduction would not start until the financial year 1920-21.

Dealing with the increase or Commonwealth expenditure, he said that there had been an increase of over...two million yearly in old age pensions. In the early stages of the scheme many pensions were refused, but now over 99 per cent, of those entitled accepted. He indicated that the maternity bonus in future would be confined to those really needing it,

On the question of co-ordinating borrowing, Mr Watt outlined a scheme for the creation of an Empire War Debt Commission to take over the war debts of the United Kingdom, the Dominions, and other parts of the Empire, each Government having representatives on the Commission; all debts at December 31st next to be taken over, and all sinking funds and resumption funds, then existing to be vested in the funds of the Commission. He stated that the Federal Government was making necessary representations to the various Governments interested, recommending the adoption of the proposal. He indicated the possibility of including various State debts as part of the scheme.

Mr Watt stated that during the airrent year payments for interest and sinking fund on war loans amounted to £13,030,000 and war pensions would absorb £5,000,000. The total loan to be redeemed within the next ten years amounted to £200,000,000, - added to which would be £190,000,000 war loans floated in Australia to be redeemed in the same period. . He r^uoposed that the States give the Commonwealth full control of all State and local government borrowings for three years ending 1921.