AUSTRALIA’S USE OF DOLLARS

Press, Volume LXXXVI, Issue 26199, 24 August 1950, Page 7

AUSTRALIA’S USE OF DOLLARS

Limited Relaxing Of Controls Seen (N.Z. Press Association—Copyright) (Rec. II p.m.) MELBOURNE, August 23. None of the 100,000,000 dollars loan money for Australia will be available to buy ordinary trade goods at present either prohibited or strictly rationed under dollar conservation control, says the Melbourne “Herald.”

However, some of Australia’s current dollar earnings, now used for developmental goods, may become available for ordinary trade. This would allow a limited relaxing of import controls on essential consumer goods. There may in consequence be a new or increased dollar allocation on a limited scale for importation for such items as motor-cars, machinery, newsprint, and other goods not Covered by the loan agreement.

A Government survey shows that the money will be spent on a development programme under seven general categories of industry. They are agriculture, public utilities, railways, coalmining, non-ferrom metal industry, iron and steel, and manufacturing industries. In a leading article the Melbourne “Hdtald” says: “The soundness of the loan depends on our capacity to repay with exports, and on the willingness of the lender to import from us. By it* implication that America realises the need to Clear the way towards notrriil trade the loan agreement will begih to cut a way through the frustration! that are bad for both the dollar and sterling areas.” “This provision of dollar finance will make a valuable contribution to the progress of Australia and to our ability to absorb immigrants and build up out industrial strength;” said the Federal Treasurer (Mr A. W. Fadden), comjnenting on the dollar loan to Austra- ‘ The payment of principle and interest will after 1955 be 7,356.000 dollar? a year, which is well within Australia’s capacity, and which will be covered many times over by direct dollar saving and earning capacity arising ftom development. The payments we have to make overseas Oft public debts amount to £19.000,000 Australian—only 3 per cent, of out export proceeds, as compared with 41 per cent; in 1930-31 and 23 per cent, in 1938-39. ‘The additional dollar supplies made possible by the loan are not large in relation to the total development programme. They are specialised itemi required to break bottlehecks and make possible the completion of production schedules which Would-Other-wise lag. We can afford tb spend dollars only on essential equipment and materials wpich cannot be obtained from the United Kingdom or other soft Currency areas. “The Government is particularly pleased that the loan is being made by the International Bank, and that the bank haS decided to associate itself with thfe financing of Australian development ovOr five years.”