EXPANSION OF BANK CREDIT

Timaru Herald, Volume CL, Issue 22065, 11 September 1941, Page 6

EXPANSION OF BANK CREDIT

Feature Of Australian Budget

SYDNEY Sept 8. Bank credit will be used to a degree never before envisaged by a nonLabour Government in the Budget, consideration of which has been completed. states the Canberra correspondent of the “Sydney Morning Herald." The Government will meet the House of Representatives with the Budget during Sittings which will begin on September 17. The expenditure may be well above the estimate of £350.000.000, which was authoritatively made before the political crisis forced a revision of the Budget plans. The expansion of the bank credit and post-war credits scheme, in which compulsory savings will be exacted from a wide range of incomes, will be the chief new financial device proposed by the Government. The compulsory savings scheme will largely take the place of taxation increases which would otherwise have had to be made.

On the expenditure side the pay for the fighting forces will be increased. There will also be a generous increase in the allocations for old age and invalid pensions.

Preparations For Election

An attempt by Mr A. W. Fadden to appease Labour with a . ompromise Budget was vigorously opposed by a section of the Cabinet. This section, led by Mr Menzies, claims that Mr Fadden’s proposal to raise money by credit expansion rather than taxation would lead to a spiral of rising prices and inflation. A showdown on the Budget proposals is expectc 1 at a meeting qf the Government Parties shortlj tfore ”’e Budget session. Labour circles state that Mr Cu. has decided on an election on the Budget in the belief that it is the onlv means of resolying the political position. Mr Curtin has advise” party supporters to prepare for this eventuality. This confirms the view held in some Ministerial circles that even an appeasement Budget wi’l not prevent the inevitable boilovrr.