COMMERCIAL Bank Says Australia May Reverse Financial Moves

Press, Volume XCIX, Issue 29398, 28 December 1960, Page 13

COMMERCIAL Bank Says Australia May Reverse Financial Moves

The Federal Government’s recent financial measures may well call for reversal before long, says the Bank of New South Wales in its quarterly deview. The review says that the Treasurer (Mr Holt), laid considerable stress on possible reversal in his November speech. Even before this speech, the. investment boom was weakening, financial stringency was more evident, and stocks were showing signs of accumulating. Sudden Government action had further confused the general outlook.

Yet there have been some minor reassurances—that exports may not fall so much as feared, that wool prices may steady, that

a heavy wheat harvest may offer better prospects. But world economic conditions generally do not suggest that Australia can easily avoid a readjustment of its immediate sights, the bank states. Complacent

It suggests that the Government had, until very recently, remained remarkably complacent and content to rely on existing measures.

An unexpected prolongation of the import hump, stimulated by internal boom, had probably changed governmental thinking.

No new evident factors had come to light. So Government actions had administered a psychological shock to business confidence, producing more immediate effect “than its hastily conceived and ill-digested measures.” However, the Government did show some courage in resisting the powerful clamour for reimposition of import control, says the bank.

As well, in allowing both fixed deposit and overdraft rates to rise, it had made a move of “tentative realism” which could more usefully have occurred months ago.