STORMS AHEAD

Evening Post, Volume CXIII, Issue 2, 4 January 1932, Page 7

STORMS AHEAD

THE LANG GOVERNMENT

FINANCE PROBLEMS

(From "The Post's" Representative.) SYDNEY, 31st December. Many of those who should know what they avo talking about persist in predicting an election in New South Wales this .year, even though the Government's term of office has still two years to run. Some of the predictions are based on reports that all is not well within tlie party itself—that many members of the Parliamentary Labour Party arc- annoyed afc the dictatorial methods adopted by the Premier (Mr. Lang). They know that tho Trades Hall has given Mr. Lang a free hand, but they are now inclined to kick over the traces because they are never consulted on big policy moves. For instance, they were not told that the Government proposed to legalise betting. at tin hare meetings; they were not told of the policy for the control of the city's milk supply; they were not told of important features in the- new Arbitration Bill; they were not consulted before the municipal elections in the city municipalities were postponed. Their dignity has suffered a severe blow, and there are said to bo a number of "insurgents" who would gladly see the last of Mr. Lang in the sphere of politics. So fay they have been afraid to show themselves, for they know that in the present circumstances that would mean their political annihilation. EARLY ELECTION? It is more likely that the predictions of an early election are based on tho overwhelming defeat of Labour at the last Federal election. Authorities say that the new Federal Government will bo in a position to force Mr. Lang to go to the people, and that one of its first acts will bo to consider tho financial position of New South Wales. Mr. Lang has already secured an overdraft during the current financial year of £8,000,000, and it is stated that he will be refused further accommodation. It is quite" apparent that the new Government will not be prepared to follow the example of its predecessors which kept Mr. Lang in office by advancing millions of pounds when ho was unable to pay salaries. . After Mr. Lang's repudiation of overseas interest payments, the Commonwealth, through the Loan Council, involved itself in a debt of £4,500,000 for the State Government's obligations. The only portion of that for which the Commonwealth, is secured is an amount deducted from tho State's share of Federal road grants. For months the amount has been in suspense, but it is thought that tho Loan Council, as it will now be substituted, will fix a definite time for payments. Mr. Lang would not be able to pay, and without further assistance from the Loan Council he would be forced to go to the country. The suggestion that the Commonwealth might try to administer New South Wales as a bankrupt State is not regarded as practicable in State Government circles. The official opinion is that New South Wales is not more bankrupt than any other State. Proportionately South Australia and Western Australia are worse off. New South AVales, in common with all the States, has been given Treasury bills, discounted by tho Commonwealth Bank to meet Budget deficits, which include overseas obligations. When Mr. Lang joined the Loan Council a few months ago, New South Wales took over the Treasury bills that had been issued to pay overseas interest. As New South Wales has to borrow tho money to finance tho deficit for this year, it is impossible to pay off these bills, and it is possible that they will be renewed. When the Loan Council last met Mr. Lang undertook to make further economies to the extent of £590,000, and on this condition tho bankers agreed to finance the deficit and provide money for loan works until 31st December, 1931. It is expected that when the Loan Council meets next month the manner in which all the States have met their obligations will be closely checked. However, the exact position with regard to deficits may not ' be known until later in the year when all the income tax has been collected. With a distinctly unsympathetic Loan Council Mr. Lang may as well prepare for storms. Ho will need more than an oilskin and sou-wester to keep out the rain.