AUSTRALIAN NEWS LETTER

Timaru Herald, Volume CXXXVI, Issue 19156, 12 April 1932, Page 12

AUSTRALIAN NEWS LETTER

COMMONWEALTH NOTES. SYDNEY. March 20. Economic Progress. For the second six months of 1931 the overseas trade balance in favour of Australia was £14,000.000 (sterling), excluding the movement of gold. For the second six months of 1930, the trade balance in favour of Australia was £2,000.000. This marked change is due to the decrease in importations between the periods referred to from £38,000,000 to £21,000,000. As the sale of the wheat harvest and wool clip proceeds there is a definite improvement in trade turnovers. Woollen and knitting mills are booked with orders for some time to come, and since the wool auctions recommenced | after the Christmas recess purchases , of wool by local mills have been excep- , tionally heavy. , Squaring Government Accounts. Australia’s seven Governments the 1 Federal and six States —are expected to , show an aggregate deficit for the financial year ending 30th June next, of nearly £18,000,000. This shortage null be £5,000,000 more than was provided for by what is known as the Premiers’ plan—an agreement between the seven Governments to square their ledgers by retrenchment within three years. The anticipated deficit for the first year, 1931-32, was £13.000,000 and for the second 3 r ear, 1932-33, £8.000,000. The failure to get the results expected in the first year of economy was due mainly to the policy of the Lang Government of New South Wales, where the estimated shortage exceeds £9,000,000. The Lang Government of that State —a Labour administration that broke away from the Federal Labour party—agreed to the Premiers’ plan, but afterwards refused to make the necessary savings. With public approval, further retrenchments are being to bring the debit balances Within the plan, and there is confidence that within the three years period the Budgets will be balanced. Australia Pays Full Interest on Due Dates. In February information was given about the default of the New South Wales Government in the payment of interest on its overseas indebtedness. Had that Government honoured its ob- 1 ligations under the Premiers’ plan it could easily have found the money. ■ Under a financial agreement entered nto by the several Governments in L 928 the Commonwealth assumed liaoility for all the State debts. After a slight delay, due to doubts as to the oest means of making the Lang Government stand up to its obligations, .he Federal Government remitted the money overseas and will continue to do so as the payments fall due. Bondholders can thus rest assured that the whole of Australia’s rapidly increasing assets and the resolute goodwill of an honourable people are behind their securities. The delay in remitting the last payments on account of New South Wales caused profound regret and hot ndignation throughout the whole country. Australia has paid hundreds of millions in interest and had not previously failed to the extent of a dav or a farthing. Dealing With a Rare State Defaulter. The steps that are being taken by Federal Government and Parliament to compel the New South Wales Government to meet its interest are important to the study of Federal constitutions. When framing the agreement of 1928 for federalising the State : debts the Premiers did not sense the possibility of any one Government breaking faith. Now that State default has come to pass, the Commonwealth Government with the approval of a tremendous majority of the people, including those of New South Wales, has introduced legislation to prevent anything of the kind in future. When the High Court has certified that any State is in ‘default it will be competent for the Commonwealth to garnishee its taxes and give State taxpayers full quittance. Any taxpayer who refuses to pay the garnisheed revenue to the Commonwealth, or any State Minister backing him in his refusal, will be subject to penalties ranging up to two years imprisonment. The New South Wales Government has notified its intention to contest the Commonwealth’s claim for the interest due, but as the Commonwealth has also power to withhold New South Wales’s ' share of the customs revenue and impound its loan money, it is expected that the Lang Government will not be able to carry on and will be forced to an election. In that event its utter defeat is assured. The Best and Most Profitable Transport. The financial difficulties that nave overtaken railway transport in all parts of the world have extended to the Government railways of Australia. Bor the financial year which ends 30th June next it is expected that the rail- j way losses throughout the continent; will reach £11,000,000 or three fourths of the total shortage on all Government accounts. The causes are various. Motor transport has cut into ; goods and passenger traffic following upon a vast roads-building policy. The railway lines were extended in the different States beyond the areas of payable traffic in accordance with a developmental policy that was before its time. Government staffing and Government costs in general have been more liberal than is generally the case with private enterprise. In accordance with the decision of all the Governments at the recent Premiers’ Conference, the' transport authorities are meeting under the presidency of an independent chairman to devise a programme for future transport regulation that is expected to cut out the railway deficits and give each district the type of transport—rail or road—that is the better suited to requirements. This question is accounted of vast importance to Australia, ano the commission’s recommendations, together with Ministerial decisions respecting them, are awaited with keenness. If possible, information on the subject will be given in the news letter tor April. Australia and the Ottawa Conference. Mr Bruce, former Prime Minister, and now Assistant-Treasurer of the Lyons Commonwealth Government, will lead Australia’s delegation to the Ottawa Economic Conference, and the Minister for Customs, Mr Gullett, will be included also. The decision of the British Government to give the Do--1 minions a preference of 10 per cent, on certain primary products, has given satisfaction throughout the Commonwealth, and there are hopes of preference in some form or other favourable to Dominions wheat and meat.