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Wednesday, 30 May 1973
Page: 2838

Mr SNEDDEN - My question is directed to the Treasurer. The honourable gentleman has announced that the May loan raised $80.5m, of which 46 per cent has been placed in short term August 1975 securities. Does the Treasurer regard that as being a satisfactory result? If not, what action will he take to increase suport for the next loan, which I believe is to be in July? Does he intend taking any action relating to government bond interest rates against competing money market interest rates?

Mr CREAN - As usual there has been a lot of loose talk about the results of the May loan.

Mr Whittorn - They were pretty dull results.

Mr CREAN - I have to put up with a lot of dull comments from honourable members opposite, but I am used to that. I shall repeat some information which perhaps has not been noted, that is, that no cash loan was undertaken in May of last year when the previous Government was in office. In May 1971 a loan was raised in the rather abnormal circumstances of a very depressed economy. The sum of Si 97m was contributed. But if one were to take into consideration what were average periods- 1968, 1969 and 1970 - one would see that the average raised over those 3 loans was $76. 6m. On that sort of comparison the May loan was satisfactory enough.

If the Leader of the Opposition believes that interest rates are too high, I suggest that he make some sort of exhortation to those bodies in the community on which there is no restraint at the moment and which are offering 9 per cent and 9i per cent for short term money. Those who are concerned about inflation at least ought to acknowledge, as was acknowledged in a question asked of me earlier this morning, that there are other costs besides wages. What do honourable members opposite think is the reality of the situation when the interest rate structure goes up from 6 per cent to 6i per cent on government bonds? Is that an increase of only half a per cent or is it an increase of about 8 per cent if interest is regarded as the price for money? If the Opposition wants to co-operate with me in, perhaps, calling for a moratorium on interest rates, I will be happy to listen to any suggestions. But to suggest in isolation that I should tell honourable members now what I think the loan situation may be in July would, I think, bc highly irresponsible. I am sure the former Prime Minister thinks so and I hope he will tell his former Treasurer that.

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