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Wednesday, 3 May 1961

Mr Ward d asked the Treasurer, upon notice -

1.   What funds were available to the Commonwealth Development Bank for the performance of its functions at the time it was established?

2.   What additions have been made to its funds since? 3 What is the .present state of the bank's finances and what amount is available for further advances?

4.   What is the total amount of outstanding advances made by the bank showing also the amounts under principal headings such as jural, secondary industry, &c?

5.   Are the bank's funds adequate for its future needs; if not, is it proposed to supplement them, and from what source will they be supplemented, or is it proposed to curtail the Bank's future activities?

Mr Harold Holt - The answers to the honorable member's questions are as follows: -

1.   On its establishment on 14th January, 1960, the Commonwealth Development Bank took over the assets and liabilities of the Mortgage Bank and Industrial Finance Departments of the former Commonwealth Bank of Australia totalling approximately £39,000,000. The main sources of the bank's funds were the capital and reserves of the two departments amounting to £15,500,000 and the Industrial Finance Department's borrowings from the Commonwealth Savings Bank totalling £16.200,000 at the commencement date. In addition, the Development Bank was provided with £5,000,000 of new capital from the funds of the Reserve Bank. Liquid funds available to the Development Bank at the commencement of business amounted to £9,100,000 against which there were direct loan commitments of £2,200,000.

2.   Apart from loan repayments and certain minor items, the only subsequent addition to the funds of the Development Bank has come from profits. For the year ended 30th June, 1960, net profits amounting to £582,035 were credited to the Commonwealth Development Bank Reserve Fund. These moneys are available foi use in the bank's operations.

3.   The bank is approving loans at an annual rate in the vicinity of £10,000,000. At 22nd March, 1961, the funds immediately available to the bank were £7,700,000 against which there were direct loan commitments of £6,400,000.

4.   The total amount of outstanding advances at 22nd March, 1961, was £18,400,000 of which £9,100,000 is classified as rural and £9,300,000 as industrial. In addition the Bank's hire purchase outstandings for producers' equipment amounted to £18,300,000 on the same date.

5.   The Development Bank's funds position is kept under close review by the Commonwealth Banking Corporation Board and also by the Government, from the viewpoint of ensuring the adequacy of .the funds at the Bank's disposal.

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