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Thursday, 13 September 1973
Page: 940

Mr SNEDDEN - My question is addressed to the Prime Minister. If savings bank depositors accept a lower interest rate, as the Prime Minister has just said they should, does this not mean that each of those depositors in savings banks will subsidise the cheaper mortgage interest rate on which the savings banks will be able to lend money for mortgages? If this is the fact does it not contradict what the Treasurer was just pointing out to the House, that when you give one group an advantage you are likely to place a burden on another group? Therefore, will the Prime Minister reconcile as to who is to receive the benefit and who is to receive the burden? Does he not now accept that the announcement made about interest rates last Sunday night was a wrong decision?

Mr WHITLAM - There is no proposal to reduce the interest which is paid to depositors with savings banks. The depositors with savings banks have for many, many years made it possible for people who get savings bank loans to build houses, to do so at lower interest rates than are available to any persons other than those who receive defence service housing. Savings bank housing loans are the cheapest in Australia except for defence service housing loans. Accordingly, people who deposit money with the savings banks for the purposes which seem good to them are in fact helping people who get money from savings banks to build or buy houses. The announcement which I made last Sunday night did not make any reference to bank interest and I am not going to have it inferred that it did. It is quite easy to understand what it said. It referred to the bond market and it also referred to revaluation. It is comforting to see that at least the right honourable gentleman and his colleagues have accepted without the demur which they made 9 months ago, the fact that Australia should responsibly, for internal and external reasons, have revalued her currency.

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