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Thursday, 11 April 1957

Mr Cairns s asked the Treasurer, upon notice -

1.   In view of the evidence of decline in housing finance from private sources, including the statement of the Prime Minister that any decline in housing finance has occurred in the private sector in the economy, will he take steps to reach agreement wilh the trading banks that advances for housing be given priority over advances which are more profitable for them?

2.   If agreement cannot be reached, will he take action to direct the trading banks to this end under section 27 of the Banking Act 1945-1953?

3.   Will he lake steps to reach agreement with the trading and savings banks to lend money for housing in greater proportion in conjunction with second mortgages accepted by other lenders?

4.   Will he take steps to release funds to the trading banks from the special accounts held by the Commonwealth Bank on condition that these funds are used to finance home building alone?

Sir Arthur Fadden - The answers to the honorable member's questions are as follows: -

1.   I am informed by the Commonwealth Bank that the number of loans approved by the major trading banks for the financing of new houses has recently risen. I am also informed that the amount of funds provided by the private savings banks for financing new houses has been increasing. The future movement of these figures will, of course, be watched by the Commonwealth Bank. In present circumstances, it is not felt to be necessary to take action of the nature suggested.

2.   See answer to No. 1.

3.   The requirements of the private trading and savings banks in relation to the security to be provided by a borrower for housing or other loans are for the banks themselves to determine.

4.   The purpose of the special accounts system is to regulate the overall volume of bank credit. Action of the nature suggested would not be consistent with this purpose.

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