BIG DEFICITS

Hokitika Guardian, 30 January 1932, Page 5

BIG DEFICITS

AUSTRALIAN FINANCE.

LYON’S FEAR OF COLLAPSE

(Australian tress Association.)

(Received this uay at 9.20 a.m) MELBOURNE, January 29. That no sacrifice by tlie citizens in the other States where the burden has been spread, could save them irom a general collapse, it New South Wales lancd to give proper elreA to the J;remieis' Plan, was tile statement made by the Prime Munster and Feueiai Treasurer, Hon. J. j,yons, to the Loan Council and the Premiers’ uomerence, in explaining tne nnancial position as the ooimiiouwealth saw it. Air Lyons added tnat up to the present, tlie principal of equality of .sacrifice nad not been uniformly applied. He said that reports prepared lor the Treasurer, according to the Premiers’ Pian, and subsequent adjustments, showed that the deficits of the Commomvea.th and States lor tlie financial year 1931-32 should be £12,220,000, but the revised estimates show this .sum to bo exceeded by £5,840,000, making a total of deficits in the Commonwealth and the States of £18,060,000. Out of the £5,840,000, by which the amount

of deficit contemplated in the financial plan had been exceeded, the increase in the deficit of New South Wales amounted to £3,-100,000, in the redaction of adjustable expenditure, to comply with the Premiers’* Plan, New South Wales was short of fchg required savings by £1,860,000. Mr Lyons said that the Commonwealth Government, and the State Governments of Victoria, Queensland, Western Australia and South Australia ail had reduced their expenditure by more than was stipulated -under the plan, achieved an exact 2(J per cent, reduction. In his address to the conference, Mr Lyons directed attention to the fact that the Governments owed a total of £78.826,000 bn short-dated unfunded loans. He announced that the Commonwealth Government intended to invite the parties to the sugar agreement, to review its terms. GRAVEST APPREHENSION. COMMONWEALTH’S FLOATING LOAN. MELBOURNE, Jau. 29. There were dramatic developments at the meeting of the Federal Loan Council '»to-day, A letter was received from Sir Robert Gibson (the Chairman of the Comonwealth Bank), in which he emphasised that the floating debt was assuming such proportions as to cause the Commonwealth' Bank Board the. gravest apprehension. TJie letter added: “And unless measures are adopted to dbai witli the situation at the present moment, the system and the financial resources of the country must break down under the strain, resulting iij the most- serious financial consequences. It is needless to point out that the Commonweatih Bank Board canot control the situation except by refusing to provide national finance.” Sir Robert Gibson added that whflo the Bank Board appreciated what has already been done in the way of economy, it was of the opinion that the whole position should be reviewed without delay.

THREAT OF FURTHER DEFAULT. MELBOURNE, Jan. 29. At the meeting of the Federal Loan Council there was a further surprise when the announcement was made by the Premier of New South Wales, Mr Lang, that unless his Government received immediately an advance of half a million sterling, it must default on Its overseas payments, the total actually due being nine hundred thousand. LOAN REFUSED LANG. BY LOAN COUNCIL. MELBOURNE, January 30. The Loan Council considered Mr Lang’s application for half a million and refused to sanction it. The Prime Minister told Mr Lang it, was a 'matter for the Commonwealth Government'. The Federal Cabinet are holding a special meeting on the subject. Speaking at a complimentary luncheon by Victorian Chamber of Commerce the Prime Minister discussed tile financial crisis. He said it was imperative that every Government balance its budget. He emphasised the gravity of N’.w iSoutli Wales position, which was responsible for nine millions of the total governmental deficit of eighteen millions. The time had arrived when favoured treatment to New South Wales must, erase.