Did the Treasurer's 1978-79 budget speech state that the proportion of savings banks' deposits required to be held in public securities and liquid assets would be cut from 45 per cent to 40 per cent for the purpose of making funds available for housing loans; if so what indications are there that the resultant extra liquidity has been used by the banks to provide loans for housing.

In the 1978-79 Budget speech, the Treasurer announced that, to expand the savings banks' capacity to lend for housing in 1978-79, the proportion of savings bank deposits required to be held in certain prescribed assets (mainly liquid assets and public securities) would be reduced from 45 per cent to 40 per cent. The Treasurer re-affirmed the Government's desire that housing finance institutions should lend to homeseekers to the maximum extent. Lending levels would nevertheless remain subject to lenders ' own commercial judgments. The necessary amendment to the Banking (Savings Banks) Regulations took effect on 29 August 1 978.

The reduction in the prescribed assets ratio has facilitated a strong lift in savings banks' lending for housing. In the twelve months to September 1 979, the value of housing loan approvals for dwellings by all savings banks rose to $2,627 million, an increase of almost 19 per cent on approvals for the twelve month period to September 1978. For savings banks subject to the Banking Act, housing loans outstanding at September 1 979 represented 49.8 per cent of deposits with those banks, compared with 47.3 per cent a year earlier.