AUSTRALIA’S DILEMMA

Taranaki Daily News, 7 February 1931, Page 6

AUSTRALIA’S DILEMMA

MENACE OF THE DEPRESSION

CONFERENCE AT THE CAPITAL

REFUSAL TO REDUCE WAGE RATE.

PRIME MINISTER DETERMINED.

By Telegraph—Press Assn. —Copyright. Rec. 10 p.m. Sydney, Feb. 6-

Although Australians have been diverted temporarily from their troubles 'by the deplorable happenings this wee! in. the Dominion, they are again beginning to wonder when the heavy pall of depression which hangs over the. Commonwealth will show signs of lifting. Every Government in every State if looking to the Commonwealth Government for a lead. Every citizen in every State awaits anxiously some tangible pronouncements which will afford work for breadwinners and relief, from the intolerable economic depression, which threatens to develop into something more sinister. Action by the Commonwealth Government in the direction desired began early this week at Canberra with a conference between the Prime Minister, the Treasurer and the chairman of the Commonwealth Bank. Their conversations concluded yesterday, and now a conference of the various Premiers and Treasurers has begun at the Federal capital to-con-sider the three-year plan for the finwv•• cial rehabilitation of the Commonwealth Reports arriving from Canberra inqi--cate that there is already a hitch, both Mr. Scullin and Mr. Lang declaring that they will not consider.. any plan mvob - ihg a reduction of wages or the standard of living. . L The Prim© Minister, addressing the conference on the national finances, reviewed the heavy fall cf exports and the terrific growth of unemployment. Hr said the Governments of the States and the Commonwealth were faced with the task of meeting a very serious budgetary position, He estimated the Commonwealth deficit for 1930-31 would be £10.000,600 and those of the States five millions. He feared the position the following year on the basis of present conditions would be even worse. Mr. Scullin emphasised that although the Commonwealth Government was a party to th© Niemeyer agreement by which the Budget must be biilancOd,, it ' had been impossible to honour the agreement owing to the immense decline in Customs and excise revenue and other sources. “The task to which We set ourselves was too great for immediate accomplishment,” he said. The Federal Government’s commitments for the year were as follows: Interest and sinking fund, £23,000,000: exchange, £3,009,000; war : invalid and ■ old age pensions, £20,000,000; defence, £3,000,000; payments to the States; £12,500,000; public utilities, £11,000,000; . ordinary departments and miscellaneous services, £6,500,000; total, £79,000,000. Turning to the Government’s ■ loan debts Mr. .Scullin said the short-term indebtedness of thg Commonwealth and States by way- Of overdrafts and treasury bills at the end of this mbnth wag estimated at £55,500,000, of which £38,000,000 was owed in London and the rejnainder in Australia. At the. present rate of exchange the problem of meeting overseas liabilities involved the payment of an extra £19,000,000.

Mr. Scullin ’ urged the conference io turn its attention to a reduction of the interest rate on future loans and add-, ed that the essential need at the moment was a revival-of industry in order to provide work, which would naturally lighten the task of restoring budget equilibrium. Shortly after the conference-, settled down to business the Prime astonished the delegations by declaring that the committee of financial experts which drew up a plan far submission to the conference had no right to make recommendations; it Was merely required to collect data and statistics for the information of those present.