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Hokitika Guardian, 1 July 1931, Page 4

Tim position in regard to balancing the budget of Australia is still far from clear. The Premiers’ Conference h i d <io\vn certain conditions as a means to the end desired, but it is not plain yet that all the States will cooperate as whole heartedly as desired. Mr Lang is a very uncertain quantity, and the position is now more complex because of his wages tax and its probable all round effect. Much lias been said and heard of the conversion loan scheme, its a. means to save interest payments, so contributing specially to the reduction of expenditure. The proposal has been well received, but those concerned are making it a point that on condition all other portions of fcho balancing scheme '~iiro put into effect simultaneously, conversion will be agreed to. This is the considered judgment of the large life insurance companies which hold many millions of loan bonds, and their decision probably controls the full effect of this portion of the recovery scheme. As part of that scheme, a Very essential faefcoj; is also tlve carrying out of retrenchments. This affects Government expenditure generally, and Mr Lang is riot proving too agreeable to the move. Actually, the success of tho conversion scheme as indeed the whole recovery of Aai-stralia at this juncture, depends on Now South Wales. M-r Lang’s retrenchment policy might not fit in with the Melbourne agreement, and in that event it is conceivable that the Premiers’ deliberations would have been a waste. Action in regard to reducing the public expenditure is the first essential move to win the confidence of the people. Up to a certain point the Federal Government was equally culpable with New South Wales in refusing to reduce expenditure. The effect of that passive resistance seems now to be realised by Mr Scullin, a,nd he is prepared to act. Mr j.ang, however, iis far from converted to similar action, though the specific- importance of imposing economies by all round reductions should now be beyond question, The financial orgies of high wages and extravagant subsidies must end. The army of unemployed has grown enormously and will increase till a veritable dead end will result. The situation is most serious and has its reflex in this country, but until Mr Lang is in the final corner, apparently he will not yield to the obvious and strive to disentangle the finances of the State.