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Thursday, 4 June 1970

Mr BURY (Wentworth) (Treasurer) |12.53| - by leave - ] move:

That the Bill be now read a second time.

This Bill seeks parliamentary approval to borrowings by the Commonwealth of up to $ US 100m for the purchase of general defence equipment in the United Slates. Under the Loan (Defence) Act 1966. the Commonwealth arranged borrowings of $US450m to assist in the purchase of defence equipment in the United States. Those borrowings were almost completely committed by orders placed up to last December, and the Government wishes to make provision under the present Bill for further borrowings to finance orders placed from the beginning of this year for additional purchases of defence equipment in the United States. The loans arranged under the 1966 Act were all with the ExportImport Bank of the United States. They were used for the purchase of general defence equipment and for some payments on the F111 aircraft.

The Loan (Defence) Act 1968 provided for the boro wing by the Commonwealth of a further $US75m to assist in financing the purchase of F111 aircraft. No drawings have yet been made against that loan and the borrowings to be made under the new proposed Act will therefore not be used to finance any payments on the F1 1 1 aircraft. It is expected that the Export-Import Bank of the United States will provide the loan funds to be raised under this legislation. We are at present negotiating with the Bank for this purpose, and the Bill has been drafted to provide authority for the Commonwealth to accept the usual provisions of Export-Import Bank loan agreements. Since the borrowing is for defence purposes the approval of the Australian Loan Council is not required. I commend the Bill to honourable members.

Debate (on motion by Mr Crean) adjourned.

Sitting suspended from 12.56 to 2 p.m.

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