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Friday, 23 November 1979

Senator Wriedt asked the Minister representing the Treasurer, upon notice, on 20 September 1979:

(1)   Did the Prime Minister, on 6 September 1979, describe the Primary Industry Bank of Australia as 'operating so successfully'.

(2)   Has the Primary Industry Bank experienced shortages of loan funds on a number of occasions; if so, for what period has the bank been unable to lend funds.

(3)   What is the total amount of income equalisation deposits which has been made available to the bank each month since its establishment.

(4)   What has been: (a) the total number of new loans made by the Bank; and (b) the amount of loans constituting refinancing of loans made by the trading banks and other financial institutions.

Senator Carrick - The Treasurer has provided the following answer to the honourable senator's question:

(   1 ) Yes, in his speech at the opening of the Cane Growers' Executive Building in Innisfail, Queensland.

(2)   The Primary Industry Bank has advised that, consistent with banking practice, it has on occasion restricted loan approvals to conform with funds availability, but loan drawdowns have continued since they commenced in December 1978. As indicated in its First Annual Report, the Primary Industry Bank significantly reduced the volume of loans approved during the period 1 July 1979 to 19 September 1979 pending finalisation of its 1979-80 funding arrangements.

The Bank has advised that, upon completion of these arrangements, the approval rate was escalated to make up for this reduction. For the period December 1978 to June 1979 drawdowns totalled $ll3m. For the period July to midOctober 1 979 drawdowns have totalled a further $44.3m.

(3)   The Commonwealth has provided the Bank with $75m in low interest loan funds from the Income Equalisation Deposits Trust Account. These funds have been deposited with the Bank in two separate payments- one of $30m on 7 February 1 979 and the other of $45m on 2 1 September 1979. The blending of these funds with the Bank's commercial borrowings has enabled loans to be made to primary producers at rates of interest that are lower than would otherwise be practicable.

(4)   The Primary Industry Bank has advised that it approved 2,401 refinance loans totalling $l68m from the inception of lending in November 1978 to early November 1979. Of these, 570 loans totalling $43. lm were for the restructuring of existing debt.

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