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Tuesday, 12 June 1928

Mr GULLETT (HENTY, VICTORIA) .- As this will be the last opportunity honorable members will have, until the introduction of the next budget, of discussing our financial position, I consider it my duty to say a few words on the subject. I trust that the new budget will mark the beginning of a new phase in the administration of the Treasurer. I earnestly hope that the new budget will be distinguished from those which we have had to consider in recent years by searching and drastic economies, and a positive reduction in taxation per capita, and expenditure from loans. Further, I hope it will be attended by rigorous economy in the administration of the departments. If it is not distinguished by those characteristics it will meet with the disapproval of many honorable members, and the condemnation of the whole country. In the five years which ended on the 30th June last, public money was spent more loosely, and less productively, by both Commonwealth and State Governments than in any other similar period of peace in the history of Australia. The figures for those five years cannot fail to cause all thinking people the deepest concern. It is quite true that we reduced our war debt in that period by £34,S00,000 ; but our total Commonwealth public debt increased from £416,000,000 to £461,000,000. In other words, in spite of all we hear about sinkingfund provisions, the total public debt of the Commonwealth increased in that period by £10,200,000. This crushing burden is serious for the nation to-day, and it will be even more serious for it to-morrow. I am quite aware that the Commonwealth Government is not responsible in any way for State finance; but there is in these days a close .association between the Commonwealth and the States in financial affairs, and the example of the Commonwealth is not likely to be ignored by the States. The total public debt of the Commonwealth and States in the five;year period to which I have referred grew by £159,000,000. In 1914 the public debt of the Commonwealth and % Hie States amounted to £336,000,000. But, as the result of the reckless pace at which we have been travelling, we have in the last five years, increased our indebtedness by half as much as the total debt we had incurred in the 100 years prior to 1914. I understand that the Commonwealth and the States borrowed abroad last year £40,470,000, and New Zealand only £5,000,000. "With from three to four times the population of New Zealand, we borrowed on the overseas market seven or eight times the amount borrowed by our sister dominion. To my mind that is the reason why our credit in Lombard-street and Wall-street is substantially below that of New Zealand. In consequence of this extravagant borrowing, our annual_ interest bill and taxation have also increased greatly. I admit that the increase in our total loans is not solely responsible for the increase in the interest, bill; but it has been a strong factor. In 1922 the Commonwealth was paying £20,700,000 per annum in interest; in 1927 the amount had increased to £24,115,000. I am referring to the financial year ending the 30th June in each case. Our annual interest bill in the five years has, therefore, increased by £3,415,000. Another serious aspect of the situation is that the rate of interest of all Federal loans has increased during the five years by 5s. lid. per cent. This Government is not solely responsible for the increase in the rate of interest; but the additional indebtedness obliges the taxpayer to submit to increased taxation. That, I suggest to the Treasurer, is a strong argument for greater economy in administration, and in borrowing and expenditure.

Mr Duncan-Hughes - We have had to go outside of the Empire to raise some of this money.

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