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Wednesday, 20 May 1970

Mr SINCLAIR (New England) (Minister for Shipping and Transport) - As to the amendment, which the Government will accept, there are a couple of aspects that need to be mentioned. The honourable member for Lilley (Mr Kevin Cairns) has suggested that the Corporation might well move out of phase with normal Government monetary policy.

Mr Kevin Cairns (LILLEY, QUEENSLAND) - No, wider than Government monetary policy.

Mr SINCLAIR - 1 appreciate that. The honourable member is concerned with what the word 'Commonwealth' inserted here might mean. I referred to Government policy. In terms of the word 'Commonwealth' he has intended to embrace as wide a field as possible of Government monetary policy. The interpretation I am prepared to put upon the word in the amendment is that it would not bc limited in the context of monetary policies only to those expressed in the Government's Budget transactions but that it would include total monetary policies directed to the wellbeing of the whole Australian economy. The honourable member for Lilley pointed out during the course of his speech a moment ago that he feels it would be possible for the Corporation to move out of phase. I can understand that. He feels that if it did so this might place it in a position where the intention of the Government and the whole monetary policy in the form of words which I have just used might create difficulties. To that extent the Government is prepared to accept the amendment.

Let me add 2 qualifications. First of all, there are restrictions within the legislation which require the Reserve Bank to give approval for internal borrowings. The Corporation, of course, is not intended to have nor could it be subjected to Reserve Bank controls in matters where other competitive financial institutions, in particular the merchant banks which are operating in a similar field, are free of them. Consequently while the amendments covers the whole field of monetary policy it would not be intended, nor would it be possible, for the Corporation to act, it not being a bank, within the control of the Reserve Bank other than where specifically designated in the legislation. 1 think it is within this area that the basic distinction between the Corporation as an investing body and the other institution, the refinance bank, can best be drawn because the other bank, being specifically a bank, must necessarily operate within the restraints which apply equally to all banks. This Corporation on the other hand is intended specifically to operate with no greater restraints than are applied to overseas capital which is invested in Australia and to marshall capital and apply it to those purposes for which the Corporation is constituted. There is one other matter the honourable member for Lilley mentioned and that is the quarterly statement. I would not like to give an undertaking as to the practicability or possibility of issuing quarterly statements. However, I will undertake to examine the matter and advise the honourable member whether such a course is convenient. With those qualifications the Government is prepared to accept the amendment.

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