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LOANS FOR TASMANIA
Satisfaction Expressed By
Treasurer
Works Programme For Year
.pHE allocation of loan money to Tasmania made at the meet-
ing of the Loan Council in Canberra.this week was de-
scribed by the Treasurer (Mr. Dwyer-Gray), who returned to
Hobart yesterday, as most satisfactory. The net loan pro-
gramme authorised for Tasmania for the current financial
year was £1,371,000, which, it was stated, would be adequate
to meet all the Slate's essential commitments.
rVHE Treasurer said that the Common-
wealth Co-ordinator of Works (Sir
Harry Brown) had recommended a total
of £1,352,778 for works and commitments
in Tasmania, This amount was made up
of £896,328 for works he considered "es-
sential" and commitments: £26,850 for
works in the category of ' first priority";
£64,600 for works in thc category of "sec-
ond priority"; £25.000 for a new Govern-
ment printery, which he considered most
desirable, and £340.000 allowed as a.per-
mitted Treasury defict for 1940-1. These
amounts were Tasmania's full require-
ments but the net loan programme author-
ised was £1,371,000, which would cover
everything, even if it became necessary
to budget for a deficit of £340,000. This
would depend on the amount of the spe-
cial grant to Tasmania, and thc financial
grogramme to be decided at the end of
eptember. The amount of £340.000 was.
therefore, in the nature of a contingency,
and might not bo required at all. or only in
part. The figure could not be taken as
an indication of the Government's finan-
cial policy, and had been brought for-
ward solely to protect the State in all cir
cumstances.
The Treasurer explained that Tasmania
had gained a new allotment of £155,0110
arising from the discussions at the Loan
Council in relation to the differential war
expenditure in the various States by the
j Commonwealth, and the need for thor-
oughly safeguarding the employment
position. Sir Harry Brown had not dealt
with the differential war expenditure, and
I had informed him, when in Hobart, that
I he had received no instructions in this
regard. He had accordingly directed his
attention to the minutes of the Loan Coun-
cil meering last May. This letter was
read at the meeting of the Loan Council
this week, and, as a result, £750,000 was
added to the allocations of Queensland,
West Australia, and Tasmania, Tasmania's
share being £75.000. ' An amount of
£1,250,000 had been added to safeguard
the employment position, and all States
shared in the distribution, from which
Tasmania gained £80,000.
Defence Expenditure
The Treasurer said South Australia was
aggrieved that the amount to be borrowed
on behalf of Tasmania was greater than
that for South Australia, which amounted
to £1,296,000, but finally unanimity wai
reached. Tasmania's net programme ol
£1,371,000 would be financed partly bj
utilising the "carry-over" of £222.00t
from the preceding year. To the remain-
der, £1,149,000, should be added £240.00(
to provide a "carry-over" of that amounl
as from July 1 last. The total amount tc
be borrowed ' on behalf of Tasmania foi
1940-1, therefore, became £1,389,000. Sil
Harry Brown had reported that £163.001
of defence money would be spent in Tas-
mania for ,the current financial year, ir
addition to its own authorised net loar
programme of £1,371,000. Later proposai
brought forward at the Loan Counci
showed that defence expenditure in Tas
mania would bo considerably more, and
would amount to £225,000.
Mr. Dwycr-Gray said Sir Harry Brown
had recommended a Tasmanian pro-
gramme of semi-governmental borrowing
that amounted to £101,800. This includ-
ed an extra amount of £?,500 for the sew-
erage scheme at Moonah, which, added to
the £35,000 already authorised for thc
work, brought thc amount to £42.500 for
the current financial year. The full cost
of the scheme would be £85,000 and. as it
had been recommended by Sir Harry
Brown, it was certain that the Federal
Treasurer would sanction the full amount
on condition that only £42.500 was spent
Ulis year. The Burnie Marine Board also
had applied for £50,000 for harbour im-
provements, and this had been approved.
Taking the results as a whole, he felt ho
was more than justified in the comments
he had made after the previous meeting of
Ihc Loan Council that Tasmania had no-
thing to lose but everything to gain by
accepting the co-ordination plan. The
position would be reviewed in December,
but there was no intention of making any
"cuts" in the approved programme, and
there might even be increases where they
were considered in the public interest. If
reductions were made they would only be
with the sanction of the State concerned.
If, for instance, Tasmania did not find it
necessary to make use of £340,000 for its
permitted deficit, a reduction could bc ap-
plied, but this would not interfere with
the works programme. The total amount
to be borrowed for tl. 3 Commonwealth
and the States was £17:000,000.
He had again advanced proposals that
the amounts required should be raised
through national credit, issued solely
through the Commonwealth Bank, either
interest-free or at whatever rate of in-
terest the Federal Government thought
fit. The matter of interest was of no
concern, os the transaction would bc
done solely through- the Commonwealth
Bank, and int«est paid would be re-
turned to the people through the profits
of the bank. Mr. Spender had admitted
that it was impossible to raise the large
amounts required for defence purposes
and ordinary requirements of the Com-
monwealth and States by taxation and'
ordinary public loans, and said there
would be considerable use of national
credit, but, unfortunately, what Mr.
Spender meant by national credit was
borrowing through the Commonwealth
Bank in association with the ' private
banks, as was done last year, when
£12,000,000 was borrower at 3V4 per cenf,
and from which transaction the banks
profited directly through the exploitation
of Australia's own national credit.
The Premier (Mr. Cosgrove), in a
statement issued in Melbourne yester-
day, also expressed satisfaction with the
result of the meeting of the Loan Coun-
cil, and said thc amount allocated to
Tasmania would be sufficient to meet all
essential commitments, including the ex-
tension of the hydro-electric scheme and
the completion of the launceston .Gene-
ral Hospital,
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