How did the Ferderal Government address the problems that occured during the depression?

Essay by givemeanessaynowJunior High, 9th grade March 2004

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The depression, of 1929, led to many problems in Australia that had to be addressed by the Australian Federal Government. The depression started on Thursday the 24th of October 1929 due to a stock market crash in Wall Street New York, America. The crash at first devastated New York and America but it quickly spread around the world. The problems for Australian Federal Government concerned their policy decisions on unemployment, imports and exports and government spending.

The Australian Federal Government was split into two groups. The NSW Labor party split into State Labor (supporting Lang) and Federal Labor (supporting Scullin). The split in Labor ranks worsened and caused an early Federal election in December 1931, which was won easily by the United Australia Party led by Labor's former Treasurer, Joseph Lyons. The political unrest did nothing to help policymaking regarding the depression. Jack Lang tried to maintain and use loans to fund public works to create prosperity.

His attempts were challenged and blocked by the supreme and high courts. In 1931 his inflation plan reduced rates and loans but the Federal Scullin Labor government rejected his proposal. The right wing, thought that they should save money rather than borrowing money and getting into more debt. They also thought that they should increase taxes and pay back their debts. The Left wing thought that they should increase government spending to increase employment. They wanted to borrow money to stimulate the economy, their theory was that people with jobs would buy products, which would keep businesses open and in turn would provide employment. Economists of the time differed on their opinions regarding this, however, some worldwide economists were pressuring governments to spend and invest as a way of relieving unemployment and rejected at wage reduction.

The disagreement on how to spend...