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Premiers' Conference



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FO R PRESS:

PM N o .-42/1971

PREM IERS' CONFERENCE

S tatem ent by th e P rim e M in iste r, M r. W illiam McMahon

T h e re have been fra n k d is c u ssio n s today betw een th e S tate P r e m ie r s and the C om m onw ealth T r e a s u r e r (M r. Snedden) and m e re la tin g to the fin an c ia l p o sitio n of th e S tates d u rin g the Budget y e a r 1970/71.

U nanim ous a g re e m e n t h as been re a c h e d on am o u n ts of s p e c ia l ad d itio n al fin an c ia l a s s is ta n c e to be pro v id ed to th e S ta te s by th e C om m onw ealth in re s p e c t of th at y e a r.

T h e re w as a g re e m e n t about th e need fo r continued stro n g r e s is ta n c e to th e in fla tio n a ry tre n d s in p ublic a u th o rity e x p en d itu re s on goods and s e rv ic e s but a t the sa m e tim e rec o g n itio n by the C om m onw ealth of the d iffic u ltie s confronting th e S tates in financing th e ir p ro sp e c tiv e Budget d e fic its fo r 1970/71.

T h e P re m ie rs laid g re a t s t r e s s upon th e need to re d u c e th e ir

p ro s p e c tiv e c a sh d e fic its w hich s till re m a in d e sp ite the m e a s u re s they had taken sin c e F e b ru a ry to im p ro v e th e ir fin a n c ia l p o sitio n s.

With th is in m ind, th e C om m onw ealth o ffe re d a d d itio n al rev e n u e a s s is ta n c e in 1970/71 of $43 m illio n . T h is would be d is trib u te d betw een th e S tates in p ro p o rtio n to th e fin a n c ia l a s s is ta n c e g ra n ts (se e a tta c h e d tab le).

, T h e C om m onw ealth’s o ffer w as u nanim ously a c c e p te d on th e firm u n d erstan d in g th at th is a d d itio n al a s s is ta n c e would b e used to re d u c e th e S ta te s ' rev e n u e d e fic its and not to in c re a s e e x p e n d itu re in 1970/71 above that follow ing th e m e a s u re s re c e n tly taken by th e S tates. ·

Follow ing th e la te s t re v is io n to th e e s tim a te d in c re a s e in a v e ra g e e a rn in g s for. th e tw elve m onths ended M arch 1971, th e g ra n ts to w hich th e S tates w ill now be e n title d u n d er the fin an c ia l a s s is ta n c e g ra n ts fo rm u la fo r 1970/71 have been re v is e d up w ard s by $5. 6 m illio n . T ak en w ith th e .

$43 m illio n sp e c ia l a s s is ta n c e o ffere d by the C om m onw ealth, th is in c r e a s e s the re v e n u e s a v a ila b le to th e S tates in 1970/71 by $48. 6 m illio n .

A lthough th e r e h as been som e p re lim in a ry d isc u ssio n of th e fin an c ia l p ro b le m s lik ely to be facin g th e S tates in 1971/72, to w hich I b rie fly r e f e r r e d in

m y opening sta te m e n t (co p ies have been c irc u la te d ), it w as a ls o u nanim ously a g re e d th at it w as not p ra c tic a b le to p ro c e e d to any d e fin itiv e p ro p o s a ls about th e S tates p o ss ib le c a sh re q u ire m e n ts a t th is C onference. T h e s e q u e stio n s w ill be tak en up again betw een the C om m onw ealth and th e S tates a t a f u r th e r m eetin g to w a rd s th e

end of th is fin an c ia l y e a r.

I w elcom e th e d e g re e of c o -o p e ra tio n shown betw een a ll th e P r e m ie r s and th e C om m onw ealth. I fe e l it w as an exam ple of th e s e n s ib le w orking of C o m m o n w ealth /S tate re la tio n s h ip s .

CANBERRA 5 A p ril 1971

PROPOSED_ADD [ΠΟΝΑ L_ASSISTA NCE_T_0 THE_STATES_1970-_7j.

$ m illio n

Proposed E stim a te d T o ta l

S pecial A dditional A dditional

R evenue F in ancial A s s is ta n c e

A s s is ta n c e (a) A s s is ta n c e

- G ra n ts (b)

New South W ales 1 4 .1 1 .9 1 6 .0

V ic to ria 10. 6 1.4 ■ 1 2 .0

Q ueensland 6 .6 0 .9 7 . 5

South A u s tra lia 4 .6 0. 6 5 .2

W estern A u s tra lia • 5 . 0 0 .6 5. 6

T a sm a n ia 2 .0 ' 0 . 2 2 .2

T o ta l 4 3 .0 5 .6 48. 6

(a) T o ta l of $43 m illio n divided betw een th e S ta te s in p ro p o rtio n to t h e ir e stim a te d fin an c ia l a s s is ta n c e g ra n ts , including a d d itio n al g ra n ts of $2 p e r head to New South W ales and V ic to ria , of $ 1 2 .5 m illio n to W estern A u s tra lia and of $10 m illio n to T a s m a n ia a s w ell a s th e ad d itio n al g ra n ts to Q ueensland re s u ltin g fro m th e $2 m illio n addition to its b a se .

(b) T h a t is , a d d itio n al to th e e s tim a te s la s t supplied to th e S tates

on 11 M arch. T h e e stim a te d ad d itio n al g ra n ts r e s u lt fro m a

re c e n t upw ard re v is io n to th e e s tim a te of th e in c re a s e in a v e ra g e w ages in th e y e a r ended M arch 1971 fro m 8 .2 5 p e r cen t to 8 .7 5 p e r cen t. T h e fin a l e s tim a te of th e in c re a s e in a v e ra g e w ages,

and h ence of th e g ra n ts , is s till su b je ct to c o n sid e ra b le u n c e rta in ty .