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Friday, 3 April 1987
Page: 1819

Senator HAINES —My question, which I direct to the Minister for Finance, follows a question asked yesterday by Senator Chaney which referred to reports in the Press that the Government is considering selling off a large number of government enterprises, including the Overseas Telecommunications Commission, Aussat Pty Ltd, the Australian Industry Development Corporation, the Commonwealth Bank of Australia, Australian Airlines and Qantas Airways Ltd-at least that is what the reports say. What net economic benefits would flow from the sale of these enterprises, given any reduction in the public sector borrowing requirement which would result from their sale would be offset by private sector borrowing, almost certainly overseas borrowing, in order to finance their purchase? Further, does the Minister agree that the sale of these enterprises would be consistent with this Government's overall reliance on a deregulated market, even where this conflicts with party policy and results in policy indistinguishable from that which would be pursued by the Opposition if it were ever to win government?

Senator WALSH —In relation to the last part of the question, though not the last line, there is no correlation necessarily or indeed any correlation in practice between public ownership and regulation or deregulation. As I pointed out yesterday when replying to Senator Chaney, the Thatcher Government in England has sold off public assets and formerly publicly-owned business enterprises while simultaneously increasing the degree of regulation. So both in principle and in practice in some countries at least recently there is necessarily no correlation at all between regulation or deregulation and public ownership.

Turning to the first part of the question, consistent with what I have been saying for two years or more, I will not confirm or deny whatever rumour the Press Gallery is running today or yesterday, whether the rumour was generated by the Press Gallery itself or fed to it by somebody from outside. The central part of the question concerned what net economic benefits would flow from the sale of government enterprises. There is no simple answer to that. But the point ought to be made that if government property, whether it be real property like land or buildings or whether it be a publicly-owned trading enterprise, is not returning a yield on its value at least equal to the market rate of interest, the sale of such a property would obviously yield short term gains. However, it would also yield ongoing benefits to the public and to the Budget because the public debt would be reduced by an amount commensurate to its sale compared with what it would otherwise have been and the public debt interest obligation in perpetuity likewise would be reduced.

Senator Haines also mentioned overseas borrowing and so on. Well, somebody-no matter who; whether it is the Government or some private source-as long as we are running a current account deficit, must borrow from overseas to match that deficit. The final point is that the Australian Government does own assets overseas as well as in Australia and, if the continued ownership of those assets cannot be justified in economic terms, there are very clear gains to the country, from every point of view, in disposing of those assets.