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Thursday, 1 December 1983
Page: 3119


Senator MAGUIRE —My question is directed to the Minister representing the Treasurer. What is the Government's reaction to the result of the recent bond tender, reported in today's Press, which confirmed further falls in interest rates?


Senator Chaney —It is appalled by the money supply figures.


Senator MAGUIRE —This is obviously a very sensitive subject. Is the Government now looking to reductions in home mortgage interest rates charged by the private banks, particularly in view of the fact that the private banks did not match the recent half per cent reduction in home loan interest rates recently made by the Commonwealth Savings Bank?


Senator BUTTON —The Government is pleased with the interest rates situation resulting from the bond tender of 29 November.


Senator Chaney —How is the money supply?


Senator BUTTON —I might say, for Senator Chaney's edification, that the question I have just been asked was not a dorothy dixer; I was not aware of it coming. However, I am grateful to Senator Maguire for making the opportunity available, by his question, to provide a very limited reaction and say that the Government is content with the response to the bond tender of 29 November. The results are very satisfactory and confirm the general decline in interest rates which has been taking place. I simply make the additional point that many interest rates have already been lowered. Prime overdraft interest rates have gone down 2 1/2 per cent since the end of March and home loan rates have been reduced by 0.5 per cent, I am not sure when but within the last few weeks. Of course, the Government would be pleased to see these rates come down further and we are hopeful that that process will continue to take place. Insofar as any further ramifications of the honourable senator's question are concerned, I will obtain a more detailed answer from the Treasurer and advise him.