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Tuesday, 28 August 1973
Page: 509

Mr Wilson asked the Treasurer, upon notice:

(1)   Has his attention been drawn to the statement by the Premier of South Australia, the Hon. D. A. Dunstan, that the Co-operative Building Society of South Australia cannot be criticised on the grounds (a) that it lends to people who have no real need to get relatively low interest loans to buy houses or

(2)   What building societies can be criticised on either or both these grounds.

(3)   What is the average length of time upon which deposits remain with (a) building societies and (b) the Commonwealth Savings Bank.

(4)   What is the average length of time over which housing loans by (a) building societies and (b) the Commonwealth Savings Bank are in fact repaid.

(5)   Does the Commonwealth Savings Bank borrow short and lend long.

Mr Crean - The answer to the honourable member's question is as follows:

(1)   Yes. The attention of the honourable member is invited to what I said in reply to questions asked of me in the House of Representatives on 22 May 1973 by the honourable members for Bradfield and Gwydir (Hansard, pages 2362-4), and also to what 1 said in a joint Press statement issued by the Minister for Housing and myself on 22 May 1973 following a meeting we had that day with representatives of the Permanent Building Societies Association Limited of New South Wales.

(2)   See reply to (1).

(3)   (a) and (b) Statistical information on this question is not available.

(4)   (a) and (b) Reliable statistics are not available.

(5)   Depositors' balances with the Commonwealth Savings Bank are withdrawable on demand except for a small segment of special investment deposits which attract a higher interest rate than ordinary deposit accounts but which require three months' notice of withdrawal.

It is true that the Commonwealth Savings Bank provides long-term housing loans and some other long-term loans. However, in the context in which this matter is raised it is relevant that the Commonwealth Savings Bank, together with other savings banks subject to the Banking Act 1959-1967. is required to invest at least 60 per cent of its depositors' balances in specified types of assets such as Australian Government and semi and local government securities. There is a further provision that within the 60 per cent figure at least 10 per cent of depositors' balances is to be held in liquid type assets such as deposits with the Reserve Bank and in Commonwealth Treasury Notes. In this latter regard, the Commonwealth Savings Bank holds liquids and shortterm securities of an . amount beyond any likely drain on its liquid resources.

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