Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Full Day's HansardDownload Full Day's Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Thursday, 9 December 1976
Page: 3567

Mr HURFORD (ADELAIDE, SOUTH AUSTRALIA) -Has the Treasurer noted the report from the latest edition of the London Economist to the effect that Australia's devaluation was not justified on balance of payments grounds, will worsen a dangerously unmanageable inflation rate and could spark off a rash of competitive devaluations and/or trade restrictions by our trading partners? Have these criticisms by a conservative economic journal of world repute caused him to doubt the wisdom of indulging in such an enormous devaluation? If not, can he say whether the prospect of retaliatory action by our trading partners is one that he views with equanimity?

Mr LYNCH (FLINDERS, VICTORIA) (Treasurer) - I certainly have noted the views reported in the London Economist. The Government rejects those views and the grounds on which they were based. I can report to the honourable gentleman that my discussions yesterday with international money market people reflect very much the fact that the decision which was taken to devalue at the rate we announced at the time has been widely recognised abroad as appropriate to Australia's economic circumstances and has been a major factor in dispelling the uncertainty which existed in the months before the decision was taken.

Mr Willis - Nonsense!

Mr LYNCH -The honourable member for Gellibrand claims that that is nonsense. Let the honourable gentleman look at judgments abroad as to the soundness of the decision to devalue. I could mention that our executive director at the International Monetary Fund, Mr Whitelaw, has reported that the executive board appreciated the factors behind the decision to devalue. I am informed also that all directors who spoke supported Australia's decision to devalue. In addition, several directors welcomed the greater flexibility that would be permitted under the new exchange arrangements. I am informed also that there was no suggestion at the International Monetary Fund executive board table that the devaluation could be regarded as a competitive devaluation.

Suggest corrections