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Wednesday, 4 March 1970


Mr BURY (Wentworth) (Treasurer) -I move:

That the Bill be now read a second time.

The purpose of this Bill is to enable the Commonwealth to meet its obligations under a Commonwealth guarantee of repayment of certain borrowings by the Australian Wheat Board from the Reserve Bank of Australia, in respect of wheat from the 1968-69 crop. To assist in the marketing of that crop, arrangements were made for the Board to borrow up to $624m from Rural Credits Department of the Bank. The date for final repayment is 31st March 1970, approximately 12 months after the drawings were made, in order to comply with section 57 of the Reserve Bank Act which requires that loans of the type made to the Board shall not be for more than 1 year.

The Board's income from sales of wheat will be insufficient to enable it to repay the borrowings in full by the due date. This will mean that, for the first time since the wheat stabilisation scheme was introduced over 20 years ago, the Commonwealth will be called upon under the guarantee. The Board currently expects that its indebtedness to the Bank on the 1968-69 pool accounts as at 31st March 1970 will be in the vicinity of $250m. The Board also estimates that recoupment of this amount from subsequent sales of wheat to overseas markets will take about 15 months.

It is proposed that the Commonwealth lend to the Board sufficient funds to enable it to discharge its debt to the Bank. It is also proposed that the Board be required to use for repayment of the loan all net receipts, after the date of the loan, from export sales of wheat of the 1968-69 pool. The Bill provides that the loan to the Board may be made available on such terms and conditions as the Treasurer determines. It is intended that the rate of interest on the loan by the Commonwealth will be the same as the rate charged for Government guaranteed loans by the Rural Credits Department of the Reserve Bank on the date the loan is made.

The Bill authorises the Commonwealth to borrow up to $300m to make the loan to the Board. This exceeds the Board's current estimate of the amount required under the guarantee, but this seems prudent in case the Board's estimate proves to be too low. The Australian Loan Council has agreed to a special borrowing programme for this purpose for the Commonwealth in 1 969-70. The terms of the borrowing will be subject to Loan Council approval. To sum up, the Bill makes provision for the Commonwealth to borrow the requisite amount and to make a loan to the Board on terms and conditions approved by the Treasurer.I commend the Bill to honourable members.

Debate (on motion of Or Patterson) adjourned.







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