A FINANCIAL TANGLE.

Dominion, Volume 4, Issue 1176, 11 July 1911, Page 5

A FINANCIAL TANGLE.

STATES AND COMMONWEALTH. f By Tel esraph—Press Association—Oooyrlthi t Melbourne, July 10. ' The Acting-Premier (Mr. W. A. Watt) j lias written to tho Federal Government j rejecting the proposal to pay as from July '1 last,''three 1 per cent, interest on properties transferred by the State to tho Com- 1 monwealth, and to set aside not less than half per cent, as a sinking fund for liquidation of debts.

Mr. Watt claims that current interest at the rate of 31 per cent, should bo paid He considers that the Commonwealth proposal is likely to seriously rupture the relations between tho Commonwealth and the States.

The Victorian Government is taking steps to call an inter-State conference to deal with tho matter.

On the inception of Federation the State Governments transferred to the Commonwealth largo numbers of public buildings, etc., used by the Departments which passed under Federal control by the Constitution Act. The basis of payment for these properties has been disputed for many years. Some months ago Mr. Kidston, then Premier of Queensland, claimed that interest on tho value of the properties should be paid from the time of the transfer. Speaking on tho subject some time back, Mr. Murray, Premier of Victoria, said that ho thought the Commonwealth Government should pay tho States interest from July last, the date on which the Brnddon clause ceased to operate. Ho did not think that interest should be asked for from tho inception of l-'etteration, as was suggested by Mr. Kidston. Tho total valuo of the property taken over by t'he Commonwealth from the States is ,£9,6-18,419. This is made up as follows::—New South Wales, .£3,674,648; Victoria, .£2,330,174; Queensland, .£1,521,868; South Australia, .£1,032,722; Western Australia, .£704,280; Tasmania, .£381,751.