With the prospect of bankruptcy facing the government, Scullin backed down and instead advanced the Premiers' Plan, a far more conservative measure that met the crisis with severe cutbacks in government spending. Pensioners and other core Labor constituencies were severely affected by the cuts, leading to a widespread revolt and multiple defections in parliament. After several months of infighting the government collapsed, and was resoundingly defeated by the newly formed United Australia Party at the subsequent 1931 election.
