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Thursday, 8 December 1960

Mr McEWEN - The Government is confident that the total effect of its policies in the economic field will be adequate to safeguard Australia's solvency in relation to its international trading requirements. It is true that the disappointing lower value of wool since import licensing was substantially lifted in February last has caused a somewhat greater run-down in funds than might have been calculated at that time but not a disastrous or unmanageable additional run-down, because it was always contemplated that there would be a run-down, and it was in anticipation of that situation that the Government pursued pretty strong policies, as the whole country knows, over a succession of years to build up our funds to pretty high levels.

The honorable gentleman not unreasonably asks what is the level of funds which the Government would regard as safe. The Government has a clear mind on this and always has had. There is no arithmetical figure to which we can point and say that that is the figure which is safe or not safe. The significant thing is the trend of movements at the time - the trend of imports as against exports, calls through invisible expenditure, earnings in the invisible field and capital inflow. Those things taken together can be evidence of a trend which, rather than any arithmetical figure, is the real indicator of whether the position is safe, deteriorating or improving.

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