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Thursday, 11 April 1946


Mr CHIFLEY (Macquarie) (Prime Minister and Treasurer) . - by' leave - On the 26th March, the honorable member for New England (Mr. Abbott) stated in Parliament that, in the period since July, 193S, Australia had accumulated gold holdings amounting to £42,500,000. He suggested that, by not making these gold holdings available to the sterling area dollar pool, Australia was leading a non-co-operative movement within the British Empire. These statements are not only inaccurate, but are also seriously misleading, particularly in regard to Australia's participation in the sterling area dollar pool arrangement. It will be recalled that, in the past, the policy has been followed of holding some quantity of gold in Australia. On the 30th June, 1929, for- example, gold to the .value of £45,000,000 sterling was held by the banking system, a part of this gold, constituting the note issue reserve. During the period 1929-32, this gold was mobilized and exported to meet the deficiency in Australia's balance of payments, thus avoiding default on the part of Australia in its international commitments. From 1933 until quite recently the amount of gold held in Australia was quite insignificant, since it was necessary to realize on all gold produced so as to enable Australia to meet its oversea obligations and to pay .for essential imports. However, during the last year or two, the Commonwealth Bank has been accumulating a small gold reserve by purchasing gold currently produced in Australia.

The estimate of £42,500,000, quoted by the honorable member for New" England, represents the difference between the total value of Australia's gold production and gold imports, and the total value of gold exported from Australia during the period from the 1st July, 1938, to the 31st January, 1946. An estimate of the Commonwealth Bank's gold reserve cannot be derived in this way, since, at the end of this period, a considerable quantity of gold, which had been sold, had, for security reasons, not been exported from Australia, but was held temporarily in Australia on behalf of the Bank of England. This gold has since been exported.. The estimate made by the honorable member for New England is, therefore, inaccurate. Present holdings are approximately £18,000,000 Australian. .

I have no hesitation in refuting- the suggestion that Australia is adopting a non-co-operative attitude regarding the sterling area dollar pool. In this connexion, I remind the honorable member that the whole of the net United States of America dollar receipts, which accrued to Australia as a result of spendings by the United States forces in Australia, and from other sources in recent, years, has been made available to the sterling area dollar pool.







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