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Additional finance for the states



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P. M. No. 2C/163

ADDITIONAL -11.41:, NGE FOR THE ' T 1: 73 ' S

Statement by the Prime Minister, Mr. john Gorton

The Prime Minister, Mr. Gorton, announced today that, In response to requests from the States, the Commonwealth had agreed to provide special revenue assistance totalling q 13 million to be distributed between the four States still being affected by drought; The Commonwealth

had also indicated that it would be prepared to support an increase of $2C. million in the approved Loan Council borrowing programmes for State semi-government authorities. The States would thus have access to additional funds totalling Y33 million in 1967-65.

The Prime Minister said that the additional grants this year to the four drought-affected States would help them at a time when drought had affected their revenues. Through the procedures of the Grants Commission, such assistance would also help the budgets of the other two States of ` , 'estern Australia and Tasmania. Mr. Corton pointed out that this assistance was in addition to that being trovided to meet the full cost

of State expenditure on drought relief measures; Co far the Commonwealth had provided over :4 4 million under these aYra gemGrits and by the end of the current financial year it was expected that the total amount made available would be in excess of ",5O million.

The Prime Minister indicated that the s r:ecial revenue assistance of 13 million, which would take the form of a non-recurring grant, would be distributed between the four States concerned in proportion to their 6hareo of the 1967-SC financial assistance grants under the grants formula. These had not yet been finally determined but, on present estimates, would

provide the following amounts: -

million

New South !:: ales 5.1

Victoria 3.

Queensland 2.4

South Australia 1.7

13. 4.'

As regard.- the rroposed increase in the Loan Council borrowing

programme for semi-government authorities in 1^ -63, the Prime Minister said that the Commonwealth had offered to support an increase of ; 23 million notwithstanding the large increase from $268 million to $311 million approved at the June 1967 Loan Council meeting. Conditions in the loan market a . F1e^x ens to make it possib to raise additional

amounts in the current financial year and, in these circumstances, the Commonwealth had agreed that advantage could be taken of this situation to enable State authorities to seek loan funds to carry out additional

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programmes of work which could include such im pox tint areas as electricity, water and sewerage and roads. The Commonwealth had advised the States that as this additional borrowing authority had a special character deriving from conditions in the current financial year, the Commonwealth would no wish it to be taken as forming part of the basis on which the semi-government borrowing f:;rogrammes for 1S ;C-6s'

would be determined. The ^tates had agreed to the proposed increase.

The Frime Minister went on to say that the Treasurer, as Chairman of the Loan Council, had obtained the a'v oval of the Loan Council to the additional borrowing allocation of ;%: - million being distributed as follows: -

million

New South ale: 6.36

Victoria 7.15

Queens land 3. c7

South Australia 1. ;;G

Western Australia C. C2

Tasmania C.64

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VI: 1'!B 3R A 9th ebruary, 1965.