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Wednesday, 10 May 1961

Mr HAROLD HOLT - The Government has given a good deal of attention to this matter, as I indicated earlier to this House. I am now able to tell the honorable gentleman that as recently as yesterday, Cabinet made another thorough examination of this matter and of a detailed memorandum which I, as the Treasurer, presented to it. Arising from our consideration of the matter, we have this picture: The interim measure formally presented to the House - I take it that is what the honorable gentleman is referring to - was directed to certain conditions obtaining at that time. Speculation was rife. The rate of turnover of money was excessive. Money was being raised at interest rates which were not regarded as satisfactory, and the availability of these high rates of interest was having a serious effect upon loans floated for government purposes. These conditions existed because of the boom situation of that time, and temporary action was taken, by means of the interim legislation, to check these processes. We now find ourselves in a very different atmosphere. The boom conditions have subsided. Borrowings of hire-purchase companies and finance houses have been reduced. Indeed, there has been some lessening of hire-purchase activity and activity by the finance bodies. Speculation of the unhealthy character I have referred to has been virtually eliminated. In these circumstances the Government proposes to allow the interim measure to expire as provided for in the legislation, and does not intend to proceed with subsequent legislation. The matter of convertible notes was quite a separate one, and legislation relating to it will, of course, continue to operate.

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