Senator CAMPBELL (Parliamentary Secretary to the Treasurer)(1.10 p.m.) —In summing up the second reading debate, firstly I thank honourable senators who contributed. It is important that the government put its view in relation to the pious second reading amendment moved by the Australian Labor Party. The government will be opposing the amendment, you will not be surprised to learn. We believe that it is vaguely hypocritical coming from the Australian Labor Party who, indeed, sought unsuccessfully to sell the AIDC over a period of time. I have taken an interest in privatisation issues since I arrived in this place. When the Australian Labor Party finally decided that `privatisation' was not a dirty word, they did seek to sell the AIDC.

In many of the budgets over the past four or five years of the Labor Party's final period in government, the proceeds of the sale of AIDC were included in budget figures. It was one of those items that was announced for sale virtually every time Mr Keating, Mr Willis or Mr Kerin brought down a budget, but it never quite got done. There were good reasons for that or, indeed, bad reasons—there were problems getting the sale together. It is somewhat hypocritical that the Labor Party should come to this debate and start condemning the process which we are putting into place and it looks as though, with the endorsement of the Senate, it could be successful.

Let me turn to the principles underpinning the wording of the opposition's pious amendment. Paragraph (1) talks about a reaffirmation of the principles underpinning the AIDC's creation. Senator McGauran, in his excellent contribution to the second reading debate, said that Mr McEwen, if he were with us today, would probably have supported the sale for the reason that the AIDC was established in the way it was to promote industry and development in Australia because there was a paucity of, particularly, merchant banking skills within Australia at that time.

Anyone who could possibly say that there is a lack of merchant bankers out there trying to fund anything that moves would basically not know what they are talking about. The application and implementation of the recommendations of the Campbell committee of inquiry—as established by the then Treasurer, John Howard, and implemented, to the great credit of the man, by Paul Keating when he was elected Treasurer in 1983—have ensured that the banking system in Australia is far more vigorous and competitive than it was in 1970.

Some of my colleagues have argued that it needs to be more competitive and, as we see the implementation of the Wallis committee—the daughter of the Campbell committee—report recommendations, we hope that that will be achieved. The principles underpinning AIDC's creation may well be, in broad terms, good principles but to argue that the principles from 27 years ago are applicable now in 1997 is more a reflection of the Labor Party's approach to policy at the moment. What this is really saying is that what they did over the last 13 years was a failure, that they want to go back to the 1950s policies of the Labor Party, the 1950s policies generally—that they want to stop any tariff reduction, they want to stop reform of the tax system and they really want to call a halt to any sort of reform at all. They are saying that everything was hunky-dory in the 1950s and that we should go back to then. That seems to be Labor's new policy approach and it seems to be reflected again in this amendment.

The government, of course, cannot support the proposition that we have not put a structure in place. Paragraph (2) of the pious amendment addresses the failure of Australia's capital markets to provide sufficient long-term patient funds for industry development. Paragraph (3) relates to the government needing to establish an effective means for supporting capital investment. This government, through a whole serious of policies, is, indeed, addressing those issues. Clearly the Labor Party did much to destroy investment in Australia, particularly investment in manufacturing—in fact, investment in anything. They went so far as to engineer a recession that wiped out tens of thousands of businesses; a recession that knocked 500,000 people out of jobs.

The centrepoint of Labor's economic and industry policies seemed to be to engineer a recession so that so many of those people got wiped out. Australia is only just beginning to recover from those industry and economic policies. This government—

Senator Bishop —You are doing your best to make it worse.

Senator CAMPBELL —Senator Bishop interjects that they had to make it worse so that they could make it better. Dee Margetts would understand: it was the clear-felling approach to economic and industry policy—just wipe out thousands of hectares. Senator Mark Bishop needs to be on the record: this was the Keating economic and industry policy—we needed to restructure, so we clear-felled the Australian economy and hoped that something would emerge. Wipe out 500,000 people's jobs and tens of thousands of businesses and see what you are left with.

We do not take that view. We are implementing a range of policies. I will run through them as quickly as I can. To enable banks to invest five per cent of their core capital in small business without prior consultation with the Reserve Bank, we have changed the prudential requirements. We have changed the tax treatment of equity investment by financial intermediaries in small and medium enterprises, so that such investments will be liable for capital gains rather than income tax. Through the business equity information service, we have sponsored several private finance matching services. We have initiated a review of the pooled development funds program, in an effort to find ways of encouraging greater capital raising and attracting greater participation from superannuation funds in equity provision. We have initiated a significant study to look at the feasibility of an alternative equity market. In the area of corporations law, we have initiated a program called the corporate law economic reform program, which will look at easing prospectus provisions to make the raising of equity capital a lot easier for small and medium enterprises and at changing the exemptions within the corporations law to ensure that small and medium enterprises can access equity capital.

So this government is doing a whole range of things that the previous government ignored for 13 years which will make it easier to access investment capital, for small and medium enterprises particularly. They are things that, I am sure, John McEwen—and even Senator McGauran—would support. Ours is a 1990s approach to raising investment in Australia and not the 1950s approach of the Beazley-led opposition. They would have Australians believe that some sort of back to the future policy manifesto development program is appropriate.

We will be opposing this second reading amendment for those reasons. I urge all honourable senators to be very careful in supporting what is clearly a very pious amendment coming from the political party which did so much to destroy industrial investment in Australia and which itself proposed the sale of AIDC but failed to sell it. This is clearly a very pious amendment. I urge all senators to oppose this amendment and support the second reading of the bill.

Amendment (Senator Sherry's) agreed to.

Original question, as amended, resolved in the affirmative.

Bill read a second time.