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Thursday, 2 June 1994
Page: 1195

Senator KERNOT —My question is directed to the Minister representing the Prime Minister. During the hearings of the Fairfax inquiry I asked former Treasurer Dawkins whether he could provide concrete examples of international Australian based exporting companies actually developing after the foreign takeover of an existing Australian company. He said `there would be many' but `these things are hard to quantify and hard to verify', and he did not provide me with any examples. In the minister's answer to my question yesterday about the increase in profit flows going overseas from this country, he used similar arguments about increased investment and increased international activity and exports to justify an open-door foreign investment policy—all very theoretical. I am asking the minister whether he can name some concrete examples of where takeovers have resulted in the benefits he claimed for them.

Senator GARETH EVANS —As Senator Kernot will have noticed, I have been collecting examples right up until the last 30 seconds. There are many of them; but in the time available I have only a dozen or so to offer. Nonetheless, they will make the point. For example, Nestle in 1989 took over Arnotts Harper, Arnotts' pet food business, and exports in that business have increased from around $2 million in 1989 to $50 million now. A similar story is evident in tools, where Sidchrome—Senator Kernot's colleague's former firm—was taken over by Stanley US; in food processing where Lactos was taken over by Bongrain of France; and in pharmaceuticals where Delta West was taken over by Upjohn US. All of them are successful exporters.

  Then we go back to more familiar terrain perhaps in car manufacturing with Toyota and the engine technology brought in via Holden, GMH—the parent. Component manufacture for the vehicle industry has examples, including aluminium wheel manufacture. Exporting is going on there with Comalco and Mitsubishi cooperating at a new plant in Tasmania. The gearbox/transmission business of Borg Warner is now foreign owned.

  In defence industries we have the ASC, the Australian Submarine Corporation, utilising new technology brought in by Kockums of Sweden. Other foreign companies involved in defence systems include GEC/Siemens and Hawker Siddeley. In communications, foreign companies are involved in Optus and Vodaphone, the new licence holder; and Alcatel and BICC are involved in cable technology; plus other communications companies are involved in providing networking services or packages such as British Telecom, and Sing Tel in Singapore, and so on.

  In meat processing I will leave aside Danpork for the moment, but mention Con Agra, which has brought in new technology to the Australian Meat Holdings operations previously owned by Fosters. In chemicals and fertilisers there has been for a long time complete domination by foreigners including ICI, Fisons and so on. In minerals processing we have the processing of mineral sands through Tioxide of the UK, McGhie of the US and Ishihara of Japan; we have CRA developing the Hismelt process in iron ore making; and foreign technology being used in the development of the magnesite industry in Queensland.

  That is just a handful of examples gleaned in the last half hour or so from my office of the way in which foreign investment and foreign companies, many involving takeovers of Australian operations, have been contributing in a quite dramatic way to the Australian economy. The point is that this is part and parcel of the whole business of the internationalisation of the Australian economy. It is a two-way flow; there is business out and business in—and each way we are benefiting from it. Simply because the investment is, in these instances, foreign in character does not mean anything in terms of its negative impact on the Australian economy. On the contrary, the impact has been wholly positive in each of those areas I am talking about.

  Senator Kemp hitherto has been the person in this place who has indicated the most distaste for all things foreign when it comes to considering the way in which Australia and the Australian economy operate. I had not hitherto thought of Senator Kernot as Elmer Fudd in a dress, but if she keeps up this kind of behaviour, I am afraid I will have no alternative but to put her in the same category.

Senator KERNOT —I do not know what is worse, `Goody Two Shoes' or `Elmer Fudd in a dress'. The point is that we are not anti-foreign investment; we are not against all things foreign. We are simply seeking to get on the record what the minister is saying about the benefits. He says it is a two-way flow. Is he confident that when we go back and look at the financial details, it really will be a two-way flow and that we should not be concerned about the increase in the national accounts yesterday?

Senator GARETH EVANS —Yes, I am absolutely confident that whatever amount might be involved in repatriation of profits by way of dividends, whatever might be the amount and the contribution that makes to the net income-deficit side of the current account, when it comes to basic production and what is being contributed there to the Australian economy, and the job growth involved in that, and when it comes to the exports being generated by this, and the contribution that is made by all these companies to Australian exports—which have exceeded imports in the last 12 months; and we fully expect that phenomenon to continue into the future with the surge in activity that we are now seeing and with the opportunities that are opened up for us—all these events are working very much to the advantage of the total Australian economy and to the advantage of ordinary Australians whose job opportunities depend on that growth, in particular the growth of exports in the Australian economy.