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Wednesday, 1 December 1976

Mr LYNCH - If there is one thing that the Leader of the Opposition consistently represents in this place and outside, it is the Khemlani mentality. I would like to say more about that but because of a matter being dealt with outside this Parliament it is not appropriate for me to say any more about it. Hopefully, the time may arise when one is able to say more about that. I can well imagine the Leader of the Opposition seeking to borrow himself out of trouble to the extent of $1 billion or $4 billion. It so happens that so far as this Administration is concerned responsibly we recognised that any option which presented itself to the dimension of $ 1 billion would, of course, have been an option which would not have created confidence; it would have created a sense of continuing uncertainty. The decision to devalue has completely dissipated that uncertainty, much to the chagrin of the honourable gentleman. I say to him, notwithstanding the reference to Venezuela and other countries, that we do not see that as our example. Rather, we responded to a situation which had been developing with the assistance of some people very close to the honourable gentleman during recent months.

That decision having come to a point of inevitability we looked, of course, at the possibility of borrowing in excess of $ 1 billion. But certainty, no; uncertainty created, yes. If the honourable gentleman knew anything about international financing he would be aware of a term called conditionality'. This Government was not prepared to put itself into hock to that extent. Beyond that, of course, with the absence of any certainty about the question of devaluation on the basis of a decision to borrow $1 billion, we recognised that we were not prepared to afford the losses which that sum would have had in itself. I say to the honourable gentleman that no doubt he still conceives of Khemlani. I leave that conception in his mind and his mind alone.

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