“No Devaluation By Australia”

Press, Volume C, Issue 29437, 13 February 1961, Page 11

“No Devaluation By Australia”

(Elec. 10 p.m.)

CANBERRA, February 12.

Australia has no intention of either devaluing her currency or of reintroducing import licensing control, it was stated authoritatively today.

Nor has Australia any intention of introducing a free exchange rate—a move suggested as possible in London

The Australian Government led by Mr Menzies. has defined its attitude against devaluation and import licensing—both suggested as possibilities because of Australia’s worsening balance of payments position. The Government also reaffirmed its adherence to the stringent anti-inflationary measures it introduced last November, aimed particularly at the motor and non-dwelling building industries as well as land boom speculators and excesses in consumer goods production. Mr Menzies has not made any formal denial of the devaluation rumours, reportedly because of a financial protocol. Ever since the former British Chancellor of the Exchequer, Sir Stafford Cripps, denied devaluation rumours in 1949 and devalued the £ about two months later. Commonwealth Governments have “soft-pedalled" on devaluation comment.

But the Government made certain there was a leakage of a statement by the Treasurer. Mr Harold Holt, to a special meeting of Government members that neither move had even been contemplated as a possibility The full effect of the Government’s credit and hire purchase squeeze has not been fully felt yet. Large-scale dismissals in industry, following those notified by the motor trades, are looming into sight as the pace goes out of Australian spending and expansion.

But Federal Ministers remain confident that after the labour adjustment the squeez will cause, and the near crippling of many land developers and speculators, that expansion will pick up again by the end of this year They say Australian import rate, still running at boom levels. will after several months show a drastic drop back to an annual rate of about £A9OO million. This rate would make it unnecessary to consider import licensing.