AUSTRALIAN FINANCE

Wanganui Chronicle, Volume 74, Issue 144, 20 June 1931, Page 14

AUSTRALIAN FINANCE

KtIKENCHMENT PLAN PROGRAMME COMPLETED ATTITUDE OF MR LANG A long statement embodying the pro posals adopted by the Premiers’ Conferonce in Melbourne was issued by the Prime Minister of the Commonwealth, Mr J. 11. Scullin, at the final meeting of the conference last Thursday. The concluding resolution was that emergency sessions of all Parliaments should bo summoned to pass the necessary legislation. Mr Scullin said that the total deficit of tho seven Australian Governments would bo £31,000,000 for tho present financial year. Tho Governments were now going behind at the rate of £40,000,000 per annum, in spite of rej ductions of expenditure amounting to i £11,000,000 per annum since 1929-30. The deficits had been met hitherto by bank overdrafts. Tho Commonwealth Bank had notified the Governments that the limit to that process has been reached. Early in July thy Governments would have insufficient means to meet their obligations. Tho conference had, therefore, adopted a plan which combined all possible remedies in such a way that the burden would fall as equally as possible on everyone, and no considerable section of the people would bo left in a privileged position. An Indivisible Plan “The plan has been adopted by the conference as a whole, each part of which is accepted on the understanding that all the other parts are equally and simultaneously put into operation,” said Mr .Scullin. It embraces the following measures:— (1) A reduction of 20 per cent, in all adjustable Government expenditure, as compared with the year ended June 30, 1030, including all emoluments, wages, salaries, ami pensions paid by the Governments, whether fixed by statute or otherwise, such reductions to be equitably effected. (2) Conversion of the internal debts of the Governments on the basis of 22J per cent, reduction of interest. (3) The securing of additional revenue by taxation, both Commonwealth and State. (4) A reduction of bank and savings bank rates of interest on deposits and advances. (5) Relief in respect to private mortgages. “These proposals require the greatest effort in economy and taxation which the conference considers it safe to attempt,” Mr Scullin added. “The effect will be still to have a gap of from £13,000,000 to £15,090,000 to be covered for a time by borrowing.”

Interest on Mortgages Most of these proposals h ve already been explained in detail. The provision of relief for mortgagors was referred to a sub-committee, which earlier in the week presented the draft of a bill providing that any mortgagor might apply by notice to the Court at any time within 12 months of the commencement of the Act for a reduction of tho interest payable. Unless th« mortgagee satisfied the Court that there were special circumstances the Court would make an order for the reduction of tho rate of interest at the rate of 22J per cent. Every order would apply only to interest accruing due after tho commencement of the Act, and would continue in force during tho continuance of the mortgage, unless the Court, for special reasons, otherwise directed. There was some discussion of relief other than by reduction of interest, on the lines of the recent legislation in New Zealand. However, the confcrcnct adopted the committee’s rccommenda tions, with an addition that interes should not be reduced below 5 per cent Mr Lang’s Reservation Tho proceedings of the conference last week were marked on several occasions by speeches by Mr J. T. Lang. Premier of New South Wales, in which he bluntly declared that he did not agree with the plan in all its details. His adhesion to tho decisive resolution was qualified by a reservation that the Government of New South Wales would not proceed with the other economy measures “unless and until the conversion loan shall have been successfully and effectively carried out.” Air Scullin said that rather than break up the conference and not have all the Governments at one with tho plan, he felt members should meet the difficulty raised by Mr Lang. What, they proposed to do would occupy live or six weeks. After further discussion Mr Lang said that so long as the official reports incorporated his reservation he would agree to the motion. Mr Scullin: Then I declare tho motion agreed to. At the closing session on the following day the conference agreed, ou Mr Scullin’s motion, to the appointment of a committee comprising Mr Sculliu, Mr Laug and Mr Bill, Premier of South Australia, to go into the matter of overseas interest due by New South Wales and tho position of the Government Savings Bank “to work out, if possible, a formula or an agreement which may have to be submitted to a la te r P rum io rs ’ conference.”