Cablegram unnumbered, CANBERRA, 30 August 1948, 10.45 p.m.
The Prime Minister made the following statement tonight (30th August). (Begins.) The Government has decided to include in its budget proposals a gift of £A10 million to the Government of the United Kingdom.
The United States, the United Kingdom, and European countries are at present discussing the division of ERP dollar aid amongst participating countries.
Many of the European participants in ERP aid are however practically as short of sterling as they are of dollars and it has become urgently necessary to find means of financing their sterling deficits so that they may maintain their purchases from the sterling area. These purchases largely comprise raw materials including of course wool. With this object in view the United Kingdom Government is also engaged in discussions with representatives of ERP countries and the United States.
Australia stands to benefit from any measure which assists the external buying power of European countries because of the important markets we have as a member of the sterling area. We are therefore vitally interested in the outcome of the present discussions.
Over and above the burdens carried by the United Kingdom during the war and the loss sustained by her through her war effort she has played a foremost part in stimulating European recovery despite her losses of investment and trade she has supported a number of European countries who have been critically short of sterling.
Last year Australia had a favourable balance of payments and there was an increase in ‘London funds’. Accordingly, after full consideration, the Government has decided to make a gift of £A10m. to the United Kingdom which will afford her a measure of assistance in the burdens she is continuing to carry. Ends.
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[AA : A3300, 867]