The Great Depression
Niemeyer wanted a Deflationary policy to balance Australia’s budget by reducing spending, wage and social welfare so the country could pay back its debt to Britain. Niemeyer’s plan didn’t work to well and made unemployment rise ten percent. The effectiveness of Sir Otto Niemeyer’s plan was not very good as from the start people doubted that his advice wouldn’t work. Government spending and wages were cut which made unemployment rise from nineteen percent of the workforce to twenty nine percent in one year.
Edward Granville Theodore was the Scullin government’s Treasurer and he said instead of cutting spending, they should put in an inflationary policy to increase spending and stimulate the economy. Theodore wanted the government to put and additional thirty six million into the economy to make more employment but the plan failed because the Commonwealth Bank refused the idea of putting more money into the economy. The effectiveness of Edward Granville Theodore’s plan was not good because the Commonwealth bank just refused it because they weren’t controlled by the government and didn’t like the idea.
The Premiers Plan was made in 1921 at a meeting of state leaders. The federal and state governments wanted to put in something like a deflationary policy to cut spending by twenty percent, including cuts to pensions and wages and taxes were to be increased to give more money to the government. The effectiveness of the premier’s plan was alright because in 1932 there were gradual improvements in Australia’s economy. Wool and wheat beginning to recover and unemployment went down from thirty per cent to fourteen per cent in three years.