FEDERAL CABINET IN PERIL

Timaru Herald, Volume CXLV, Issue 21215, 9 December 1938, Page 9

FEDERAL CABINET IN PERIL

CLASH ON NATIONAL INSURANCE Hint of Dropping of Measure Growing Burdens of Cost of Defence Increased Taxation Now Inevitable United Press Association—By EJeC’ i Telegraph—Copyright SYDNEY, December 8. The Canberra correspondent of "The Sydney Morning Herald,” states that the Lyons Government is facing the most serious crisis that has arisen since it was elected to office. The critical situation has been forced by differences over what should be the fate of the national insurance scheme, and it is believed that it may lead to the resignation of the Attorney-General (Mr R. G. Menzies), and possibly the Federal Treasurer (Mr K. G. Casey). The only alternative to this appears to be the adoption of a course in the House of Representatives that may lead to the defeat of the Government on an issue sufficiently vital to force an election—the question of the exemption of rural industries from the insurance scheme. After a meeting lasting fourteen hours, the Ministers broke up at 2.15 a.m. to-day, without having found a way out of the impasse. DROPPING IMPORTANT POLICY MEASURE NATIONAL INSURANCE Onlted Press Association—By Electric Telegraph—Copyright (Received December 8, 10 p.m.) CANBERRA, December 8. The Federal Cabinet to-day decided to drop the National Insurance Bill, which required contributions to begin next May, and to delay the proclamation of the original act until probably May or June next year. This decision, says the Canberra correspondent of “The Sim” solves the problem of the threatened resignations of Mr Menzies and Mr Casey. FACING BIGGER PROBLEM MILLIONS NEEDED FOR DEFENCE United Press Association—By Klee trie Telegraph —Copyright (Received December 8, 6.30 p.m.) CANBERRA, December 7. Instructions for the immediate start | with the naval budding section of the defence expansion programme were given to-day, by the Minister of Defence (Mr Street), who announced that £51,660,000 of the £60,000,000 vote, would be spent in Australia.

Increased Taxes Likely Federal taxes for this year, which were increased substantially when the budget was Introduced in September, may be increased again before the year closes. This prospect was mentioned by the Prim* Minister (Mr J. A. Lyons) when he discussen the problems associated with financing the defence programme.