STATE FINANCES

Hokitika Guardian, 31 May 1932, Page 2

STATE FINANCES

NEW SOUTH WALES DEFAULT

“END OF DISASTROUS RULE.”

The Monthly Review for May of H. Byron Moore, Day, and Journeaux, stockbrokers, Melbourne, publishes an interesting -summary of the events leading up to the dismissal of the Lang Government.

'Never in -the history of Australia, it says, have politics had such a dominating influence on trade anc! finance. No issue of greater importance than that invofved in the failure of the Government of NeAV -South Wales to honour the Financial Agreement betAveen the UommonAveai'th and -the States 5 has •arisen in the history of Federation, and no greater damage to Australia’s credit has ever before been experienced.

The continued default of the extran e leader of the Ncav South Wales Labour Party thr-SAV a burden upon the resources of the- Commonwealth and remaining States, Av,hich they accepted to keep faith Avith the creditors. The Commonwealth Government principally Avas the .aggrieved party, for the responsibility of meeting all. obligations was legally theirs. Moreover, it Avas the only authority that corn'd act for the people of the other States, avlio Avere aggrieved by the action of the NeAV South Wales Labour Premier,

The elaborate provisions of th e CommonAvealtK Constitution were insufficient to defeat the critical position which had .arisen, and amending legislation was necessary to enable the Constitution to function in the manner which its* founders originally intended. Fortunately safeguards existed Avhich prevented the extreme and disloyal leader of the Ncav South Walcr- Labour Party from reaching his objectives. The currency of tho country was in the hands of the Commonwoaath Bank Board, the Loan Council controlled ciU borrowings, and the people's money was held by the private trading banks.

The Prime Minister, possessed of all the traditional element's of the AngloSaxon race, expressed his determination to preserA*e Australia’s credit and honour and to take Avhatever steps hoAA’ever drastic, Avere necessary to combat any further damage to -the good name of the Australian people.

LANG’S LAST' EFFORT

To do so effectively it was- necessary to add still further /legislation to the Statute Books of the CommonAvealth, and accordingly the Financial Agreement Enforcement Act Ava-s quickly passed through both Houes' of Parliament! The original Act left Aveaknerses Avhich this cunning defaulter quickly took advantage of, and a series of amending Acts were-necessary before -it was evident that hi-s defeat Avas imminent. In full recognition of the position confronting Him, amWttwrea’feation of the hopei&ssliess of any further resistance, and as ail acknowledgment of defeat, he introduced chra legislation by imposing a capital levy of 10 per cent, on all mortgages within the State of New South Wales. This legislation was apparently designed in an attempt to wreck the Avhole fabric of the capitalistic system, and destroy the remnants of confidence, so that a state of chaos and disorder Avould result and leave a ivreckage from Avhich it Avould be impossible for his successor to emerge.,

With dramatic suddenness the Governor of New South Wales intervened and dismissed the Labour Ministry, which ended its disastrous ride. Without doubt no other Administration since the establishment of responsible government has inflicted greater damage on national credit and honour than the Lang Labour Ministry of New South Wales. Their eighteen months of office will forever remain a black page in the hi.story of Australia, ancl future generations will have just cause to look back with regret, shame, and amazement that such a rebellious Government, cou’d rule the people of the most important State in the Commonwealth for so long. On Jane 11th the people of New South Wales will, be asked to vindicate the honour of their State, and there can be little doubt that the Labour Party will suffer a crushing defeat. On the same day the Queensland State elections w’ll be held, and the people there are likely to return the present Ministry, because they hav e followed a course of sane and honourable government, and their Premier has been one of the staunchest supporters of the Premiers' Plan.

PROMISING POLITICAL OUTLOOK

The decisive victory of the United Australia Party in Victoria adds further strength to the most promising political! outlook for many years, and there is hope at Hvt Unit all the Premiers will lv able to work in unison in failing a difficult future. There can be Mu ailtcriialive to a continuation of t Premiers’ Plan, for that aione will bring tile Governments to budget equilibrium. Any departure from sound tinancia: practice will Ini ndisastrous rea- timi.i, and it ,; s hoped that the Premiers will not b..’ hindered in their task by having to consider .any fantastic suggest tors or monetary reform*. u liicli fir mouthpaid have beor-nm planks in the pbitiornis of various political organisations. Great lP»;aHi has demonstrated that hudetds can he balanced without departing from sound economics and P’in pee. and Australia can and will do likewise.