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Tuesday, 19 March 1968

Mr McMAHON (LOWE, NEW SOUTH WALES) (Treasurer) - There are too many questions for me to answer specifically, but I think the substance of the honourable gentleman's question is whether the Australian gold producer can sell his gold on the premium markets of the world. The gold provisions of the Banking Act require that gold produced in Australia be delivered to the Reserve Bank of Australia at the price of $US35 per oz or $A31.25 per oz. Arrangements were made in 1951 that if the Gold Producers Association of Australia, which comprised all of the producers, wished to sell gold on the premium markets of the world it could repurchase the gold at the price of $US35 per oz and sell it in the premium markets. The surplus received was then distributed by the Association to the producers according to the amount of gold that the producers had delivered to the Reserve Bank. It is to be remembered that we have subsidy arrangements and that if gold is sold on the premium markets then there is a reduction in the subsidy. So many cables have arrived in recent days about what the communique issued by the gold pool countries in fact means that instructions have been given that until we can clarify the communique precisely there will be no change in the arrangements that I have mentioned. In other words, the Association can repurchase the gold if it wishes to sell it on the international exchanges.

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