Now May, with unemployment at 27.6% widespread suffering across much of the population, Scullin called another conference of the state premiers to try and forge a new deal, now resigned to the fact that compromise with the Opposition was inevitable if any plan could be implemented.
A new orthodox plan calling for 20% reductions in spending across the board for all governments was struck, and such cuts to also apply to social welfare spending.
Combined with a mass loan conversion that would reduce the interest rates paid on government bonds by 22.5%, Australia now had a consensus as to how to reduce the annual deficit from some £41.08m to £14.65m.
Although he had finally secured parliamentary and state approval for a plan, Scullin now faced a revolt from his own party.
Cuts to pensions and the poor were particular hard of Scullin, and many core Labor supporters felt deeply betrayed by this compromise of society's most vulnerable groups.
Scullin ardently defend the program, but Lang's influence as an alternative opinion leader of Labor was growing, now with state branches in Victoria and South Australia rebelling against the Premiers' Plan.

Traumatic as it was, the government finally now was implementing an economic plan, and things began to improve.
Domestic confidence, and confidence in the British loan market, began to recover and default was averted.
Voluntary acceptance of lower bond rates on government debt had been extremely successful in a patriotic campaign, wool and wheat prices finally began to rise, and government finances at both Commonwealth and state level were largely under control by October.
But with unemployment still rising (it would not peak until 1932), Scullin still faced disillusionment from many within his party, and further gains in ground by Lang.
Lang felt threatened by the apparent success of the Premier's Plan though, and renewed talks of unity between the factions had appeared with the improvement of economic conditions.
Lang Labor subsequently forced a showdown with the Scullin government in November.
With allegations arising that Theodore had abused his position as treasurer to buy support in New South Wales away from the Lang faction, Beasley and his followers called for a royal commission into the charges.
Scullin refused.
To the surprise of many observers, the Beasley group crossed the floor to join the Opposition, thereby defeating the government.
A snap poll, the 1931 election, was called.
Scullin for the first time in Australian politics made heavy use of the radio to reach voters.
The campaign was one of the shortest in history, but with open warfare between pro-Lang and pro-Scullin forces in Victoria and New South Wales, and much of the country still facing hardship and grievances against the government, a Labor defeat was virtually assured.
Labor was defeated in a massive landslide.
The official Labor Party was reduced to a mere 14 seats (Lang Labor won another 4), and Lyons became Prime Minister.
However, Scullin was not held responsible for the debacle and stayed on as Labor leader.
To date, it is the last time that a sitting Australian government has been defeated after a single term.
Now May, with unemployment at 27.6% widespread suffering across much of the population, Scullin called another conference of the state premiers to try and forge a new deal, now resigned to the fact that compromise with the Opposition was inevitable if any plan could be implemented. A new orthodox plan calling for 20% reductions in spending across the board for all governments was struck, and such cuts to also apply to social welfare spending. Combined with a mass loan conversion that would reduce the interest rates paid on government bonds by 22.5%, Australia now had a consensus as to how to reduce the annual deficit from some £41.08m to £14.65m. Although he had finally secured parliamentary and state approval for a plan, Scullin now faced a revolt from his own party. Cuts to pensions and the poor were particular hard of Scullin, and many core Labor supporters felt deeply betrayed by this compromise of society's most vulnerable groups. Scullin ardently defend the program, but Lang's influence as an alternative opinion leader of Labor was growing, now with state branches in Victoria and South Australia rebelling against the Premiers' Plan.
Traumatic as it was, the government finally now was implementing an economic plan, and things began to improve. Domestic confidence, and confidence in the British loan market, began to recover and default was averted. Voluntary acceptance of lower bond rates on government debt had been extremely successful in a patriotic campaign, wool and wheat prices finally began to rise, and government finances at both Commonwealth and state level were largely under control by October. But with unemployment still rising (it would not peak until 1932), Scullin still faced disillusionment from many within his party, and further gains in ground by Lang. Lang felt threatened by the apparent success of the Premier's Plan though, and renewed talks of unity between the factions had appeared with the improvement of economic conditions. Lang Labor subsequently forced a showdown with the Scullin government in November. With allegations arising that Theodore had abused his position as treasurer to buy support in New South Wales away from the Lang faction, Beasley and his followers called for a royal commission into the charges. Scullin refused. To the surprise of many observers, the Beasley group crossed the floor to join the Opposition, thereby defeating the government. A snap poll, the 1931 election, was called. Scullin for the first time in Australian politics made heavy use of the radio to reach voters. The campaign was one of the shortest in history, but with open warfare between pro-Lang and pro-Scullin forces in Victoria and New South Wales, and much of the country still facing hardship and grievances against the government, a Labor defeat was virtually assured. Labor was defeated in a massive landslide. The official Labor Party was reduced to a mere 14 seats (Lang Labor won another 4), and Lyons became Prime Minister. However, Scullin was not held responsible for the debacle and stayed on as Labor leader. To date, it is the last time that a sitting Australian government has been defeated after a single term.
James Scullin