THE COMMON WEALTH

Otago Witness, Issue 2894, 25 August 1909, Page 25

THE COMMON WEALTH

♦ STATE PREMIERS' CONFERENCE. SETTLEMENT OF -THE FINANCE PROBIiEM. OF A THE FINANCIAL PROBLEM. LOSSES BY THE LARGER STATES. MELBOURNE, August 18. After another interview, Mr Deakin, at. the Premiers* Conference, formulated a j eoheme dealing with finance, which will be formally submitted by him to-day. j It is understood that he suggests that the Commonwealth contribution to the States should be on a basis of 30s per head of population, and, if this is accepted, that the States be prepared to help the Commonwealth as regards old-age pensions for the present year, and thus do away with the necessity of the Federal Government borrowing to meet its obligations. . August. 20. The State Premiers and Mr Deakin have reached an agreement regarding the future financial arrangements of the Commonwealth and States, which will be ratified to-moiTOw, when they meet again, unless a hitch . occurs .over some of. the details ' which "have still 'to be settled. Though no official information is forthcoming, it is understood that the agree- . ment provides that the Commonwealth shall refund to the States 26s per head of the population annually, and that the scheme be put in force at once, the expiration of the Rraddon. clave being anticipated by a year. This latter is for the purpose of giving the * Federal Treasurer " enough money for the coming year without having to obtain a loan. It is further understood that the new arrangement is to be in perpetuity, and that the amendment to the Constitution which the change may necessitate will be submitted to the electors in March next. v The Premiers* Conference resolved €0 make a complete in.viestiga.tkni in regard to consolidating and transferring the State debts ; that in order to give freedom to the Commonwealth in levying Customs and Excise duties the Commonwealth shall, after,- July 1, 1910, pay monthly to the States a sum calculated at 'the rate of 25s per annum per head of population % in view of the heavy obligation incurred by the payment of oldare pensions, tb» Commonwealth may during the current financial year retain from the amount to be returned to the States a sum not exceeding £600,000 ; that an annual payment should be made to Western Australia of a quarter of a million In 1910 and 1911, after that year

'the amount diminishing at the rate of I £10,000 annually, half of this special amount to be deducted from the sum paid by the Commonwealth to the other States. ' August 21 The investigation into the matter of the State debts will be made by a Hoyal Commission consisting of financial experts. Federal Ministers and the Ministers of thie smaller States express themselves well satisfied with the arrangement made. Mr Murray (Victoria) and Mr Kidston ((Queensland), though glad that a. settlement of the financial question has been reached, And while prepared to -recommend its .acceptance, consider that it means a sacrifice- on the^part pf the larger. States. The Victorian Treasurer declares that its will mean that the land tax will have to be heavier than was intended. Under ' the per capita payment the amounts to be paid- to> <the- various States 1 this- .year are estimated as follow: — New * South Wales, - £2,021,000 ;. Victoria, £1,617,000; Queensland,' £7o9,ooo; South Australia, £521,000; Western Australia, £340,000:;.. Tasmania, . £235,000. Compared with. the returns under the Bxaddoa clause, New South Wales loses £250,000, Victoria £440,000, £325,000, Western Australia / £288,000, while Tasmania has; received;, a small gain. > SYDNEY, August 21. The Sydney Morning Herald says that the result of the Premiers' Conference will .be .Deceived with, mingled Reeling*.. The Commonwealth may congratulate itself on having. come out on the safe side, but it is pretty clear that Commonwealth finance is going to be a big thing for many years to come, and the present arrangement i* only 1 one step towards ite solution. The Telegraph declares that if fch« -States agree to the proposed per capita contribution, Mr Deakin will have scored remarkably, and tie State Treasurers will be placed in^a worse position than they would have been by any scheme so far put forward. { Mr Reid considers that the main effect will be to compel the Commonwealth and I State Governments to observe principles of careful finance.