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Tuesday, 29 November 1960

Mr HAROLD HOLT (HIGGINS, VICTORIA) (Treasurer) - The Governor of the Reserve Bank published over the week-end some details of the directive which had gone from the Reserve Bank to the trading banks. I think the honorable gentleman is aware of the limitations on the constitutional power of this Government with respect to some of the other financial institutions to which he refers. But so far as our power extends we have made our position clear, through the Reserve Bank, to the trading banks.

I might add for the information of honorable gentlemen that although this did not form part of the published statement of the Governor of the Reserve Bank, the letter which went out to the trading banks included a passage in my statement to this House, in which I said that it was no part of the Government's financial policy in these matters that there would, as the result of the national credit policy, be any interest increase to the primary producers and exporters or any increase on housing loans already obtained from the banks; and, indeed, persons having normal overdrafts - small overdrafts - would not be likely to be affected by the directive which had been issued. It may be that for reasons quite unrelated to the national credit policy as announced by this Government people will be told that they cannot obtain an overdraft or that the interest rate on an existing overdraft will be raised. The terms of the Government's directive are clear.

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