AUSTRALIA'S DEBTS.

Dominion, Volume 1, Issue 191, 7 May 1908, Page 7

AUSTRALIA'S DEBTS.

* FEDERAL SCHEMA. COMMONWEALTH CONSOLS. STATES TO BE FREE OF OLD DEBTS IN THIRTY - YEARS. DEFAULTING STATE MAY BE TAXED. BY TELEGRAPH —PRESS ASSOCIATION —COPYRIOHI , Molbourne, May 6. Lato last night Sir William ' Lyno (Federal Treasurer) - tabled the Commonwealth proposals relativo to the taking over : by the Commonwealth of the State debts. The scheme providos:— ■ 1. That all the debts of the States bo taken over. , . •' 2. That a Council of Finance be appointed to administer debts, raiso new loans, and control sinking funds. 3. That each State-pay for a period of five years annually to / the ComSnonwcalth the difference between its share of ' six millions and the interest and expenses duoon its transferred debt.' ■ At the' end of, the fivo years' period such actual payments tobo continued, but to be reduced ,by,a,,sliding scale operating annually for thirty years; at the end of that period - tlie States to be absolutely free of indebtedness, 'as regards : loans transferred.' •'»» 4. Tho CommonwSilth Parliament to mako appropriation of an amount sufficient to pay tho present, --.annual . interest ' aiid expenses on the debts taken over, say, 8J millions; such amount payable to tho Council of Finance./.. . [Tho explanation of the somewhat vague pro-' ' visions of the four preceding paragraphs seems to bo as follows: —The whole'of 'the debts aro • transferred to the Commonwealth, and . the : Commonwealth pays the interest on' them, ,£8,800,000. But—according, to forecasts of' tlie' ■' scheme—"the Commonwealth will credit tho ' States , with the average, three-fourths of Cus-. Toms and excise during the,|6url.years t,o .Tune, , 1907"; that means a credit"of about This is, no doubt, the" six millions referred to in paragraph 3; and the difference between £8,800,000 and £6,6oo,ooo—ttiat''is; £2;$l0,000-is : approximately i|ke "difference'- which,-under . paragraph 3, the States'are to pay annually to tlie Commonwealth. The above-quoted forecast also states:—"One-tweritir-fifth.or-' one-thirtieth of that 432,200,000 will be-taken-ovor-by the Commonwealth each: year, until in 25 or 30 years the States aro free-from this debt and the interest thereon,' and the Commonwealth will find the full i£8,800,000."! 5. Tho loans taken'over; by tlio i Common- .. wealth to bo replaced at or near maturity fay 3 per cent. Australian, Consols, redeemable twenty ' years after.. dato'of ...inscription,' or at the .option 'of *tlie Commonwealth, at. any time thereafter;? on.;-twelve'.months'' - notice. ■■ " \in■<!-■. -all-i< : .•<> ii.'.y ■ ■ 6. A Commonwealth-sinking fund to:, be-, established. ' ' ■ -< ■ ! 7. Tlio States ,to . transfer, to commissioners the present /sinking funds; ■ 8. After a loan has matured'the difference between the present rate-of. interest and the. rate payable On tho, new loan to be paid by tho commissioners into. a sinking. fund. ' i : ', * ' . 9. The sinking fund to bo under the .; control of the Council, and to be used only for buying up State, and. Commonwealth stock 'for redeoming loans at maturity. 10. Future loans required by the States to be made through the Council! tho States to pay annually to the Council.tlie interest.on ■ each loan raised, and | per cent, for sinking fund for the actual term; liability, of the States in respect: of such loan to cease .-at' 'end of'such-term;-the States-to give undertaking to pay the Council. ' 11. The Council' to 'decide the, order in which loans shall : be made j; loans" for redemption of State debts taken over to. have precedence over all other loans. 12. In the evont of the total loan requirements for any year - exceeding tho sum which, in the opinion cf the Council, it is wiso to borrow, the- Council to bo- empowered to settle in ...consultation .with the State Treasurers tho proportion to.; bo raised for each individual State. 13. In the event of nonpayment, of an amount due by the tlio Comment wealth or Council, the- Commonwealth to have power on certificate from the Council to impose a tax on that State; also, tho Council to have power to 'refuse to raise' further loans for such State for q .period, not exceeding ten years.'' ' "' ' '' 14. In consideration of the; States 'being relieved of: indebtedness tho transferred properties to bp handed by tho'States to tho Commonwealth free "of charge. 1 - POWERS OF THE COUNCIL. " TECHNICAL CONTROL,". ONLY TO DECIDE WHEN THE STATES' 'DISAGREE, ; . - j . (Rec. May 6, 11.35 p.m.| , :. . Melbourne, May 6. Mr. Deakin attended the Premiers' Conference, and answered a -number of questions explanatory ofpiis, proposals. Ho said that -the power's'of' the proposed Council of Finance would be strictly limited to technical contraband, it would only havo tho ultimate decision when the State Treasurers could not agreo among themselves. . i BORROWING .TO.-ADVANTAGE, (Rec. Mayv-7; I T.3' a'.m'.') " ,v "-' w • : " Melbourne, May 6: Mr. Deakin told the Conference that ho did not think that the financial - scheme would cause any hardships to the individual States, or would make bori-owing.more.diffi-cult. By placing big loans instead,'of individual State loan's,, tho Fiiwico: Council would regulate tho placing of loans to tho best advantage. SYDNEY PRESS ■ OPINION. . . -Sydnoy, May 6.; Tho " Sydney Morning . Herald " and tho "Daily Tolcgrapii " u .regard Sir William Lyne's scheme as impossible, as far as New South Wales is concerned. It is considered to be likely to retard progress-, and tlio development of tlio resources, of, the State.