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Wednesday, 6 November 1985
Page: 1656


Senator KILGARIFF —Is the Minister representing the Treasurer aware that, for the first time, major banks are having to ration home loans because of the Government's interest rate ceiling? Is it a fact that, in order to continue lending to home buyers, banks are offering what is known as a `cocktail' loan in which the borrower is required to take out supplementary loans with interest rates as high as 21 per cent? Will the Government review its policy of maintaining the bank home loans ceiling of 13.5 per cent in view of the fact that it is simply not working to the advantage of home buyers?


Senator WALSH —I am aware of reports that banks are rationing home loans. Whether those reports are true, I could not say. But even if they are true, of course it would not be the first time that that sort of thing had happened. As for the second part of the question, the Treasurer made a statement on whether the 13.5 per cent ceiling would be maintained. I do not recall precisely when that statement was made but I think it was about four or five weeks ago. In that statement the Treasurer said that the Government would maintain that ceiling.