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Tuesday, 20 October 1964

Senator PALTRIDGE (WESTERN AUSTRALIA) (Minister for Defence) - In line with the action usually taken by his Leader, the honorable senator is at pains to create a fear that something awful is just around the corner. Those of us who have listened to this sort of thing for many years dismiss it, just as I believe the Australian public dismisses it. Senator Fitzgerald referred to to what he called the recent credit squeeze. What I believed him to be referring to was the action taken by the central bank in respect of funds held by the various Australian trading banks.

Senator O'Byrne - It was a sort of Huggy Bear hug.

Senator PALTRIDGE - I do not understand that comment. It is a little too juvenile for me. No doubt it is in line with the honoable senator's mentality. Let me make it quite clear that this Government, with the acquiescence and support of the Australian Parliament, established a central bank and gave it authority to operate certain controls. The bank exercises its functions by making variations from time to time in the amount of liquidity which it permits .the various trading banks to have. What was done recently was in line with that policy. The central bank did no more than prudently apply the most gentle restraint to the economy when it needed that gentle restraint. That is how the central bank's action has been accepted by all intelligent people in Australia. I am surprised and sorry to think that the honorable senator should see it in any different way.

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