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Tuesday, 21 June 1994
Page: 1808

(Question No. 1282)


Senator Kernot asked the Minister representing the Treasurer, upon notice, on 28 March 1994:

  (1) Given that Australians have a right to know who controls the country's assets and industries, what is the total level of foreign ownership, other than freehold land, of the following industries in Australia: (a) processed food; (b) chemicals; (c) pharmaceuticals; (d) confectionary and beverages; and (e) banking.

  (2) If these figures are not available, why not.

  (3) What proportion of our overseas debt stems from foreign ownership of our companies.


Senator Cook —The Treasurer has provided the following answer to the honourable senator's question:

  (1) & (2)

  In recent years the Government's economic policy has included the objective of integrating the Australian market with the global economy and exposing local industries to international and domestic competitive pressures. The liberalisation of Australia's foreign investment policy has been one part of the deregulatory and market reform initiatives.

  Information on foreign investment in Australia comprises of statistics collected by the Foreign Investment Review Board and the Australian Bureau of Statistics. The Board's statistics relate to foreign investment proposals examined by the Board and are substantially different from the ABS statistics on foreign investment in Australia which seek to measure actual investment transactions between residents of Australia and non-residents.

  In the past the ABS has also conducted surveys of particular industries on the level of foreign ownership. The limited statistical information released by the ABS on foreign ownership of Australian industries is provided below.

Foreign Ownership by Industry Sector-Selected Years, Per Cent of Value Added

Foreign ownership

`Other Total Australian

`Direct' Identified' foreign ownership ownership

Mining ((a))

1972-73 37.5 12.0 49.5 50.5

1982-83 33.6 16.8 50.4 49.6

1984-85 — — 44.7 55.3

Minerals processing ((b))

1972-73 — — 39.7 ((j)) 60.3

1981-82 27.6 18.6 46.3 53.7

Manufacturing ((c))

1972-73 27.7 3.5 31.2 68.8

1982-83 28.4 4.5 32.9 67.1

1986-87 25.8 5.1 30.9 69.1

Private Sector Construction ((d))

1984-85 — — 9.6 ((j)) 90.4

Life Insurance((e))

1973 18.8 18.0 36.8 63.2

1983-84 24.5 15.8 40.3 59.7

General Insurance ((f))

1972-73 — — 45.4 ((j)) 54.6

1983-84 32.5 1.63 4.1 65.9

Registered financial corporations((g))

1984 26.5 9.43 5.9 64.1

1986 — — 38.1 ((j)) 61.9

Agricultural land((h))

1983-84 — — 5.9 ((j)) 94.1

Transport((i))

1983-84 — — 5.1 ((j)) 94.9

Banking((k))

1986 — — 21.0 ((j)) 79.0

Source: Various ABS industry studies

Notes:

  (a) Based on value added—ABS: Foreign Ownership and Control of the Mining Industry, Australia, 1981-82, 1982-83, 1984-85 (Cat No. 5317.0).

  A split between `direct' and `other identified' is not available for studies undertaken in 1984-85 and subsequently.

  (b) Based on value added—ABS: Foreign Ownership and Control of the Mining Industry and Selected Mineral Processing Industries, Australia, 1981-82 (Cat No 5317.0).

  (c) Based on value added—ABS: Foreign Ownership and Control of the Manufacturing Industry, Australia, 1982-83, 1986-87 (Cat No 5322.0). Statistics for 1982-83 and 1986-87 are not directly comparable with those for 1972-73.

  (d) Based on value added—ABS: Foreign Ownership and Control of the Private Sector Construction Industry, Australia, 1984-85 (Cat No 5343.0).

  (e) In terms of the value of premiums received for life insurance policies and annuities—ABS: Foreign Ownership and Control of the Life Insurance Industry, Australia, 1983-84 (Cat No 5311.0).

  (f) In terms of the value of premiums received—ABS: Foreign Ownership and Control of the General Insurance Industry, Australia, 1983-84 (Cat No 5309.0). Statistics for 1983-84 are not directly comparable with those for 1972-73.

  (g) Based on value of corporations' assets—ABS: Foreign Ownership and Control of Registered Financial Corporations, Australia, 1984, 1986 (Cat No 5334.0). Excludes the category "Retailers". At end of June 1986 assets (loans outstanding) reported for the category `Retailers' were $63.8 million of which foreign ownership accounted for 100 per cent.

  (h) Based on number of hectares. By location, the highest level of foreign ownership was in the NT, in which 13.0 million hectares or 18.2 per cent of its agricultural land was estimated to be foreign owned. Corresponding figures for the States were Queensland, 8.4 million hectares (5.3 per cent); WA, 3.6 million hectares (3.1 per cent); SA, 2.7 million hectares (4.3 per cent); NSW, 0.7 million hectares (1.1 per cent); Tasmania, 0.05 million hectares (2.1 per cent); and Victoria, 0.06 million hectares (0.4 per cent)—ABS: Foreign Ownership and Control in Agriculture, Australia, 1983-84 (Cat No 5536.0).

  (i) Based on value added—ABS: Foreign Ownership and Control of the Transport Industry, Australia, 1983-84 (Cat No 5335.0).

  (j) It is not possible to disaggregate total into `direct' or `other identified' foreign ownership.

  (k) Based on value of banks' assets—ABS: Foreign Ownership and Control of the Banking Industry, June 1986 (Cat No 5347.0) ABS: Foreign Ownership and Control of the Life Insurance Industry, Australia, 1983-84 (Cat No 5311.0) provides an explanation of `direct' and `other identified' categories of foreign ownership.

  (3) It is not possible to determine the proportion of Australia's overseas debt that stems from foreign ownership of companies in Australia. Some overseas borrowings are undertaken as a result of the links between subsidiaries in Australia and their overseas parent companies. For example, the proportion of debt in foreign direct investment in recent years in Australia has been around 20 per cent. Australia's thin capitalisation laws act to limit tax deductions for interest on debt owed to a foreign controller (or a non-resident associate of a foreign controller) where the debts exceeds the permitted ratio of foreign debt to foreign equity. The permitted debt to equity ratio is generally 3:1. For financial institutions the ratio is 6:1.