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Tuesday, 21 August 1973
Page: 16

Mr KEATING (BLAXLAND, NEW SOUTH WALES) - I address my question to the Treasurer. With the widening disparity between the value of the United States dollar and the Australian dollar there would be a tendency for Australian-based United States subsidiaries to raise capital in Australia by debentures and other means. I ask the Treasurer what is his attitude to this type of borrowing. Would he see such raising as bidding up the general level of interest rates, given that the gap between bank interest and the current rate of inflation is widening or, for that matter, the disparity between the bond rate and the current rate of inflation is widening? Does he regard an upward movement in interest rates as being necessarily a bad thing? Does he believe that higher interest rates would slow business expansion, encourage savings, dampen demand and ease inflationary pressures?

Mr CREAN (MELBOURNE PORTS, VICTORIA) (Treasurer) -In answer to the first part of the question, as the honourable member knows the present Government closely scrutinises the entry of any capita] to Australia from overseas. We have guidelines regarding particular sources. We deny access entirely in certain other areas. We have the variable deposit scheme to act as a barrier generally. I suggest that in view of the nature of the question I will treat it as a question on notice and give a fuller reply later.

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