The Commonwealth and individual states have separate budgets; However, all the revenues deriving from customs and the postal service are due only to the Commonwealth budget and correspondingly all the expenses connected with the aforementioned revenues and all those relating to national defense. The financial statements of the Commonwealth and of the individual states include the results of three managements: the management of ordinary income and expenses, which are covered by the revenues themselves (Consolidated Revenue Fund), the trust management (Trust Fund), the management of loans (Loan Fund). For Australia 2010, please check programingplease.com.
The Consolidated Revenue Fund includes all income from taxes, public services, loans granted, deposits, etc. and all the expenses for the single departments, for the parliament, for the administration in general and for the interest of the public debt (the subsidies that the Commonwealth pays to the states are also included in the CRF, among the expenses for the budget of the Commonwealth, among the revenue for the budgets of the states). The eventual deficit of the CRF is generally settled either with cash funds drawn from the Trust Fund or with issues of Treasurybills.
The Trust Fund refers to the management of sums entrusted to the government, deposits which insurance companies are obliged to, other deposits of disputed claims, pension funds, etc.
The Loan Fund includes the sums obtained from the loans and the expenses met with these sums, generally for public works, (railways, bridges, roads, mines, constructions, advances to settlers, etc.).
The Loan Fund began to appear in Australian balance sheets in the financial year 1911-12, but during and after the war its importance grew immeasurably. The amount of the Commonwealth public debt as of June 30, 1928 was 494.1 million pounds, of which 293.4 was due to war loans; while the public debt of the states as at 30 June 1926 amounted to 679.2 million pounds sterling. As of June 30, 1926, the public debt of Australia totaled 1014 million pounds sterling, or about 167 pounds sterling per resident. As interest for the debts raised abroad by the Commonwealth and by the individual states it is estimated that they must be paid annually no less than 30 million and a half pounds.
To facilitate foreign loans and to strengthen Australia’s credit on the financial markets of the world, some important measures have recently been taken (States Grants Act 1927) which will eliminate the two major difficulties encountered so far by Australia in securing credit conditions. more favorable: namely the lack of prior and reciprocal knowledge of the intentions of the governments of the individual Australian states in this matter, and the foreign criticism, which mainly focused on the lack of informative data and the scarcity of amortization funds.
The Commonwealth has in fact established to take upon itself the total amount of the public debts of the individual states, existing as of June 30, 1927; to allocate for payment of interest pounds sterling 7,584,912 per year of its income for 58 consecutive years and to pay annually and effectively sums to an amortization fund, to pay off existing debts in 58 years and future debts in 53 years. As a counterpart to this greater burden, the Commonwealth exempts itself from the obligation imposed on it by the Surplus Revenue Act 1910, that is, to pay each state a portion of its income at the rate of 25 shillings per resident. It was also established that the management of existing public debts and future debts, both of the Commonwealth and of the states, is the responsibility of the Loan Council, composed of a representative of the Commonwealth and a representative of each state.
The effects of these measures will undoubtedly have a large and beneficial repercussion on the economic life of Australia, a new country that absolutely needs foreign capital to enhance its resources.
It may be of considerable interest to examine the financial results of the Commonwealth budget for the past few years, expressed in millions of pounds sterling:
The financial data of the individual states are not exactly comparable, both because some taxes that in some states are due to the local government are in others the responsibility of the central government; and because similarly not all states have reserved the same functions; and again because the conditions of the various territories are very different, so that for some of them an increase in the public debt is required for works that are not only economically useful but absolutely urgent. However, here are the income and expense figures included in the Consolidated Revenue Fund account, for the six states and for Northern and Central Australia:
and to the public debt of the individual states, expressed in millions of pounds sterling:
As of December 31, 1927, the total circulation of Australia was 48.4 million pounds sterling (state and bank notes); the reserves of the Bank of the Commonwealth amounted to 20.7 million pounds sterling in gold and 55.0 million in foreign currencies; the gold reserves of the commercial banks amounted to 26.9 million pounds.
