The Premier of New South Wales is head of the government of the day. However, the Governor of the State has the power to dismiss the Premier under certain circumstances. In 1932 Sir Philip Game, the then governor of NSW, dismissed Premier Jack Lang.
The circumstances leading up to the dismissal follow.
On 13 May 1932 The Premier of NSW Jack Lang was dismissed from office by the NSW Governor Sir Philip Game. The dismissal arose from Lang's defiance of the Commonwealth Governments financial agreements legislation.Lang was re-elected in November 1930. His second term coincided with the worst years of the Great Depression. He was committed to a program of social and economic reforms introduced in his first term of government (1925-27). He rejected the so-called Niemeyer plan as a solution to the Depression and instead called for a reduction on interest on government debt and the suspension of loan payments to overseas creditors.
Under the Financial Agreement of 1928 NSW should have paid interest payments to the Commonwealth. Langs default on the payments set off a series of events including:
The High Court found that the Commonwealth could lawfully impound funds. At the same time the Commonwealth issued Proclamation No 42 of 1932 ordering NSW public servants to deal as directed with moneys received.
Lang issued another circular on 10 May 1932 in order that, so the government stated, NSW public servants could be paid. The circular suggested that as the Commonwealth apparently had power to seize NSW government funds, the state would have no money for salary payments. It also suggested that the Commonwealth had or thought it had no obligation to pay NSW public servants.
Governor Game thought the circular contrary to Proclamation 42 and asked Lang to either shown it was legal or withdraw it. Game also hinted he may ask for Langs resignation or dismiss him. Lang declined to resign and was dismissed by Game on legal advice that the circular was illegal and that Lang was breaking Commonwealth law. This was never tested in the courts.