AUSTRALIA’S TASK

Wanganui Chronicle, Volume 75, Issue 151, 29 June 1932, Page 7

AUSTRALIA’S TASK

HUGE BUDGET DEFICITS A REDUCTION ESSENTIAL UNPLEASANT WORK AHEAD [By Telegraph—Press Association—Copyright! Received June 28, 7.30 p.m. CANBERRA, June 28. At the opening of the Premiers’ Conicrence, tho Prime Minister, Mr J. A. Lyons, estimated that tho deficits of the Australian Governments for this year at £16.390.000. The estimate for 1932 33 was £2O 000.000. He said the task of the conference was to devise ways and means of reducing this to £6,000,000, which the Commonwealth Bank regarded as the limit it could finance for next year without endangering the stability of banking in Australia. Mr Lyons emphasised that the Commonwealth had not contemplated further taxation, but felt that it would have to undertake a great deal of unpleasant work in order to keep faith with its obligations. He impressed on the States tha* they must steel themselves to make fresh efforts to bring the day of balanced Budgets nearer. Also, an earnest attempt must be mad< to reduce the present short-term in* debtedness ot £45.000.000 in Australil and nearly £40,000.000 abroad. The Commonwealth Bank was quitfli unable to afford further financial relief to the unemployed. BETTER OUTLOOK AUSTRALIAN DEFICIT. MINISTERS CONFIDENT. AUCKLAND, June 27. “Tho outlook in Australia is very much better,” said the Right Hon. 8. M. Bruce, leader of the Australian delegation to the Ottawa Conference, who is passing through Auckland on the Aorangi. “We had to do some very drastic things,” said Mr. Bruce. t “For example, we had to face the possibility of an aggregate deficit (Commonwealth and States) of £41,000,000 in the financial year which will end next Thursday. As a result of the Premiers’ Plan, which provided for a reduction of 20 per cent, in all adjustable Governmental expenditure and for a conversion loan reducing all internal interest rates by 22J per cent., the position is that the aggregate deficit. notwithstanding all the trouble in New Souh Wales, has been reduced to about £18,000,000. When it is remembered that New South Wales has exceeded her allotted deficit under the plan by £7,000,000, it ijj a considerable performance to have made the progress we have. If New South Wales had carried out its part we would have reduced the deficit to about £12,000,000. This year the object is to make progressive reductions until tho budgetary equilibrium is reached.” A similar belief that Australia is now definitely on the road to recovery is held by the Hon. H. 8. Gullett, Federal Minister of Trade and Customs, who is also a delegate to the conference. “While we are not yet out of our difficulties in Australia,” he said, “we have reached the stage at which we can look forward to the future with confidence. Happily the depression in the Commonwealth, due in the main to a collapse of world prices for primary products, has been attended by .bnormally good seasons. That exceptional quantitative 'production has in some measure compensated for the shrinkage in values. This has enabled us to meet our overseas interest commitments and to keep our credit intact, dependent as we are for our prosperity upon the export of surplus primary produce. When prices collapsed our descent into the depression was extraordinarily swift and severe. Our people, however, have stood up to the crisis in a very fine way. The same factor which brought about our economic punishment will, when pricelevels for primary produce lift again, ensure for us a phenomenally quick recovery. In other words, we were almost first into the depression, and we are confident that we will be among the first out of it.”