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Wednesday, 20 May 1970

Mr BURY (WENTWORTH, NEW SOUTH WALES) (Treasurer) - I noted that some of the terminating building societies had increased their rates, but these are hot directly equated lo the bond rate. The increase in the bond rate is a direct result of the Commonwealth's being unable to raise long term funds at 6%. Consequently we have established a rate at which we may have much better prospects of raising money. The terminating building societies establish their rates quite separately. I would think that -as societies borrow substantially from banks this would be reflected in their lending rate. However, like other sectors of the market, building societies have to raise their funds in accordance wilh the rate at which lenders will provide money. I have no specific plans to deal with one particular context of interest rates: these rates will take their place with the rest. As I said, building societies will raise their funds according to the price that their lenders charge.

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