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Thursday, 26 November 1959

Mr DEPUTY SPEAKER (Mr Bowden - Order! The honorable gentleman will address the Chair.


Deputy Speaker,the Commonwealth debt is decreasing very rapidly, and the State debts are increasing at a rapid rate each year. I should be very pleased if the Treasurer would explain, when he is speaking to the bill, how this comes about if we are not writing off our debt in unnecessarily large lumps. I do not hold myself out as an expert on financial matters. These allegations were not refuted at the Premier's Conference but the Prime Minister said then that he would look into this question. I am asking whether the Government has had a look into it, and with what result. I do not want to talk at any length on this bill. I hope we shall not need the ?61,000,000, but apparently the ?37,000,000 is required because it is not coming out of revenue. The Government has put this amount into the Loan Appropriation Reserve. It then gets an overdraft so that loan money is used for defence purposes; but the Loan Appropriation Reserve has another ?37,000,000 in it. I presume that this will be used to swell loan funds if insufficient money is subscribed by the general public and the banking, business and life assurance institutions. This is like a holding company in a big business undertaking, with a lot of subsidiary companies. The directors know that they can work within that circle and, unless there is a very good companies act, the accounts can show a situation which does not exist. The Government is doing that at the moment. At the Premiers' Conference held at Canberra on 4th and 5th March, 1959, Sir Thomas Playford said, in effect, that we all ought to produce our accounts on the basis which the Commonwealth Grants Commission forces on Western Australia and Tasmania and forced on South Australia until this last financial arrangement. This extract appears in the report of the proceedings -

Sir THOMASPLAYFORD. ; If the Grants Commission checked it, it would disqualify you and rule you out for life.

Mr MENZIES - We will have a look at that point.

All I ask is whether the Government has looked at that point, and with what result. As I say, in ten years' time the States will carry the whole of the public debt and the Commonwealth will not have any. We are not being generous. The little extra that would be provided for the States by a review of the Financial Agreement would help them, and both parties to the agreement would gain the advantage of financing loan works out of revenue, instead of only the Commonwealth, one partner, having this advantage. That would be the fair, honest, right and correct thing to do under the Financial Agreement.

I was a member of Parliament when the Financial Agreement first went through the Commonwealth and State Parliaments. The whole spirit of it was to try to stop competition in the loan market and to try to share, on an agreed basis, the money raised from the loan market. In this way, the interest rate would be kept down. I say without hesitation that by financing our own works out of revenue, entirely free of interest and sinking fund payments, with the whole burden of these payments placed on the States, we have completely abrogated the whole spirit, if not the letter, of the Financial Agreement.

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