Two Years to Pay

Sun (Auckland), Volume IV, Issue 1057, 22 August 1930, Page 9

Two Years to Pay

PLIGHT OF COMMONWEALTH Finance Expert Reports HEAVY CUT IN SPENDING MUST COME BY having no external debts maturing in 1930 and 1931 Australia is given two clear years to put her financial house in order. How she can accomplish this is told by Sir Otto Niemeyer, a British financial expert, who has been conferring with State and Federal political heads on the Commonwealth’s economic plight. Drastic reductions in expenditure are recommended by Sir Otto, who gives seme summary advice upon spending.

United P.A.—'Ey Telegraph—Copyright Reed. 9.50 a.m. MELBOURNE, Today Sir Otto Niemeyer, addressing the conference of State Premiers and Treasurers, reviewed the financial and economic position of Australia. Elis address made a great impression on the members. In submitting a review of Australia’s - position, Sir Otto said Australia is oft her Budget equilibrium, off her exchange equilibrium and faced by considerable unfunded and maturing debts, both internal and external, in addition to which she has on her hands a very large programme of loan works for which no financial provision has been made. The only alleviation of this gloomy picture is that apart from the £36,000,000 of unfunded uebt, Australia, by a great piece of luck, has no external maturities in 1930 and 1931. That means in effect that she has a maximum period of two years in which to put her house in order. Australia’s credit is at a low ebb—on the 6 per cent, basis in Australia itself, and rather more abroad. It is, in fact, lower than in any of the Dominions, not excluding India, and even lower than in some of the British protectorates. It is certain that the rate of increase of output per capita in other countries in recent years has been much greater than in Australia. Sir Otto Niemeyer continued that Australia could not wish to remain for ever under the regime of emergency tariffs and rationed exchange. She must emerge from that position and show signs of progress toward an emergence. Australian standards had been pushed too high relatively to Australian productivity and to general world conditions. If Australia did not face that issue she would not be able to keep even those standards which she might hope to carry by taking timely action. The difficulty, he concluded, was not beyond control, but demanded considered progress and united action, and had to be squarely faced. Sir Otto’s report on Australia’s finances was released late tonight. #\t considerable length it reviews the indebtedness of the Commonwealth and States. It says the situation can only be met by united action in facing the facts fairly and squarely. Other countries had extricated themselves from a worse position. It was stated that the loan expenditure of the seven Australian Governments had been reduced from £24,000,000 to £15,000,000. Each Government now will receive only fiveeighths of the original sum allocated to it. SCULLIN AT CONFERENCE The Prime Minister, Mr. J. H. Scullin, spent a few minutes at the Premiers’ Conference today before taking his departure for London. Sir Otto Niemeyer and Sir Robert Gibson, chairman of directors of the Commonwealth Bank, were present at the conference. A scheme for an allround reduction in Government expenditure was agreed upon as advised by Sir Otto and plans were evolved for the revision of the States’ programmes and that of the Commonwealth, in order to balance the various Budgets. It was decided to make available a sum of £1,000,000 to South Australia

—half of which is to be contributed by the Federal Ministry—in order to ensure the preservation of that State’s solvency. It was further decided that loan moneys in future are to be spent only on reproductive works. The conference issued a statement pointing out that there was not a vestige of truth in the published re-

port to the effect that it was intended ! to abolish State Governors. No such \ discussion had occurred. REACTIONS ON MARKET CHANGE PRICES WEAKEN Reed. 10.55 a.m. SYDNEY, Today. The decline in the prices of investment stocks on the Sydney Stock Exchange is very heavy. In the mining market all sections have weakened and investors are showing nervousness through the realisation of the critical position of the country’s finances. LABOUR’S SUGGESTION COMBINED BODIES’ PROPOSAL Reed. Noon. SYDNEY, Today. At a meeting of Political Industrial Labour bodies in the Trades Hall, it suggested that the Federal Government dissociate itself from the Premiers’ Conference and, firstly, declare a five-years’ moratorium on interest payable on oversea Government loans; secondly, repudiate all war debts; thirdly, mobilise the credit of the community for the purpose of providing work or sustenance for the unemployed and the revival of industry.