! AUSTRALIA
FOR PRESS 10 March 1978
LOAN COUNCIL BORROWING ARRANGEMENTS
The Prime Minister today announced that he had written to
State Premiers signifying that the Commonwealth would be
prepared to agree to adoption by the Australian Loan Council of
proposed new guidelines for the Council's consideration of
proposals for special additions to the semi-government
borrowing programs approved by it, and for overseas borrowings
by statutory authorities.
It was agreed at the Premiers' Conference on 21 October 1977
that Commonwealth and State officials should prepare a report
on appropriate guidelines for the Loan Council in these areas.
At that Conference, the Prime Minister had made it clear that
the Commonwealth would be prepared to see a more flexible
approach as regards requirements for the financing of necessary
infrastructure investment in the States. The report from
officers had been received and had been under examination by
Governments. The proposed new arrangements, while recognising the Commonwealth's
overriding responsibility in matters of national
economic management, would allow special additions to Loan
council programs where the proposed extra borrowings were necessary
to finance development-related infrastructure normally provided
by the public sector and which could not be accommodated within
the existing Loan Council program. The new arrangements would
also permit appropriate access to overseas financial markets
by local and semi-government authorities and by marketing
authorities wishing to fund stocks held abroad. / 2 ( Over)
2.
The Prime Minister noted that further processes within the Loan
Council would be required before the proposed new guidelines
could be brought into effect.
Mr Fraser noted that the proposed changes recognise that adequate
infrastructure investment is essential to ensure that development
proceeds in Australia and that much of this infrastructure has
to be provided by government authorities. By agreeing to new
arrangements, the Commonwealth is giving further evidence of
its commitment to facilitate projects of significance to the
economic development of Australia. To this end, it was clear
that domestic sources of finance should be augmented as necessary
by recourse to overseas markets. Mr Fraser said that this action
by his Government was a further tangible demonstration of its
desire to co-operate with the States in developing new Federalism.
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