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Tuesday, 10 November 1959

Mr HAROLD HOLT (HIGGINS, VICTORIA) (Treasurer) - I do not think it would be in accordance with Standing Orders for me to offer comment or information on matters which have been canvassed in the press, but I can deal with aspects of the inquiry from the honorable gentleman which relate to matters of fact. It will be, I think, generally known that the Commonwealth Government had arranged with the members of the Australian Loan Council that any special loan raising from the International Bank for Reconstruction and Development for the Mount Isa railway should not form part of the normal loan provision which is made by the Commonwealth to all the States and divided in accordance with the usual formula. They appreciated that there were special circumstances which strengthened our prospects of securing a loan from the International Bank for this project which would not have existed in the case of a general borrowing attempt on the part of the Commonwealth Government. They saw the value to the Commonwealth of a successful loan operation if that could be arranged.

For reasons which I think have been made public by the Prime Minister, it was not found practicable to comply with the kind of condition which the International Bank laid down for a project loan of this sort. I take the opportunity here, because of statements I have read in the press, to say that it is not true that in my own negotiations overseas I found that finance could not be made available for the Mount Isa project because it was not considered sufficiently sound by those to whom our approaches were made.

The fact of the matter is that, to the extent that loan moneys are available in any quarter overseas, they are available to the Commonwealth Government and on the authority and guarantee of the Commonwealth Government, irrespective of whether they are associated with a project such as the Mount Isa railway or not. But in this instance, as the Prime Minister has already explained, recognizing the national importance of the project, the Commonwealth Government has taken upon itself to assume, with the concurrence of the Queensland Government, the sort of position which otherwise would have been occupied by the International Bank and to give closely comparable terms without, however, imposing the kind of condition which was found unacceptable by both the Queensland Government and the company directly involved.

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