<P> With the rejection of the Theodore and Lang inflationary plans, the governments of Australia met to negotiate a compromise in 1931 . The resulting Premiers' Plan required the Australian Federal and State governments to cut spending by 20%, including cuts to wages and pensions and was to be accompanied by tax increases, reductions in interest on bank deposits and a 22.5% reduction in the interest the government paid on internal loans . </P> <P> The policy contrasted with the approach put forward by the British economist John Maynard Keynes and which was pursued by the United States, which held that governments needed to spend their way out of the Depression . The plan was signed by New South Wales Labor Premier Jack Lang, but he was a notable critic of its underlying philosophy and went on to pursue his own policy of defaulting on debt repayments, which led to confrontation with the Federal Scullin and Lyons Governments and resulted in the Lang Dismissal Crisis of 1932 . </P> <P> The Labor Party soon split into three separate factions . Jack Lang and his supporters, mainly in New South Wales, were expelled from the party and formed a left - wing splinter party officially known as the New South Wales Labor Party, commonly known as Lang Labor . The Minister for Public Works and Railways, Joseph Lyons, led a conservative faction, which believed in the deflationary approach of balanced budgets and cuts in spending and opposed defaulting on debt repayments . When the more radical Ted Theodore was reinstated as Treasurer by Scullin on 29 January, Joseph Lyons and James Fenton along with three others resigned from the government, joining the opposition Nationalist Party to form the United Australia Party . The Australian Labor Party would remain in government through the parliamentary term however, with Scullin as Prime Minister, and except for a brief stint by Scullin, Theodore as Treasurer . </P> <P> The stance of Joseph Lyons and James Fenton against the more radical proposals of the Labor movement to deal with the Depression had attracted the support of prominent Australian conservatives, known as "the Group", whose number included future prime minister Robert Menzies . In parliament on 13 March 1931, though still a member of the ALP, Lyons supported a no confidence motion against the Scullin Labor government . The United Australia Party was then formed from a coalition of citizens' groups and with the support of the Nationalist Party of Australia . Lyons quit the ALP to become parliamentary leader of the newly established United Australia Party, with John Latham, Nationalist Leader of the Opposition, becoming the new party's deputy leader . </P>

When did the great depression end in australia