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Thursday, 1 December 1960

Mr UREN (Reid) .- This morning, in a question which I directed to the Treasurer (Mr. Harold Holt), I drew attention to the fact that the "Annual Bulletin of Oversea Investment " disclosed that new capital inflow from the United Kingdom, the United States and other overseas countries was only £5,000,000 more than the capital outflow. I also drew attention to the fact that, because of double taxation agreements, a great deal of the new capital inflow was a part of our own money. The Treasurer floundered in attempting to reply, and he again spoke of the Government's achievement in attracting overseas capital to this country. I remind the House that the double taxation agreements were arrived at by the Menzies Government, particularly with the United States of America Government, in order to attract new capital inflow to this country. This has not been achieved, however. The fact is that because of the double taxation agreements a great deal of our own money is being reinvested here.

Before the double taxation agreement with the United States of America was arrived at, tax paid by United States interests was at the rate of 7s. in the £1 for companies, and in the case of individuals it was at the rate of Id. in the £1 for the first £100, rising to 15s. in the £1 for amounts of £8,000 and above. To-day there is a flat rate of 3s. in the £1, and my estimate is that in this year there has been a saving to United States investors of about £4,000,000. New capital inflow to this country from the United States in this year amounted to £11,600,000, while outflow was £16,300,000. The outflow was a good deal greater than the inflow. But if we consider the true figures, we find that it was not £11,600,000 that came in, but only £7,600,000, because £4,000,000 was our own money reinvested.

I am giving this information to the Treasurer because I am quite sure he has not received full information from his department, and that he does not know exactly where we stand in regard to these matters. The total new capital inflow from all countries, including the United Kingdom and the United States, in this year was £55,200,000. The total capital outflow was £50,200,000. But if you study the situation in the light of the double taxation agreements, you will find that the saving to United Kingdom investors was not of the order of a mere £4,000,000, but that it was about £10,000,000. Year by year the position is becoming more difficult, and foreign capital is taking control of the Australian economy to a greater and greater extent.

In the little time that is available to me I wish to make a few remarks about a company that is not doing too badly in this country. I refer to Myer Emporium Limited, which has now taken over Farmers (Holdings) Limited in order to increase its empire. This company is making tremendous profits, but the Government will not accept its responsibilities and restrict the activities of this great monopolistic undertaking, although it is quite prepared to go to the arbitration courts and advocate the freezing of the workers' wages, and object to an increase of annual leave from two weeks to three. In January, 1954, the holdings of the Myer family in Myer Emporium Limited amounted to 8,236,000 five-shilling shares, which were listed on the stock exchange at lis. 4d. On 1st January, 1960, they were listed at 35s. 4d. During that period of six years there were no bonus issues, but the capital appreciation was 24s. for each of the 8,000,000-odd shares. The capital gains of that family amounted to £9,874,000. That is the extent to which the wealth of one family increased in six years.

But that is not all of the story. This year the company made a bonus share issue of one for one. The family's shareholding, as I have said, amounted to 8,236,000, and the shares to-day are listed on the stock exchange at 34s. The present value of that capital issue of one for one to the Myer family is £14,002,220. The cost of the shares, at the nominal value of 5s. each, was £2,059,150, so that the family increased its capital by £11,943,070 with the stroke of a pen. This is the kind of thing that can happen under a government which supports monopolistic interests.

The fantastic growth of the wealth of the Myer family is unequalled anywhere in the world. No eastern Sultan controlling great oil resources has acquired more wealth in the past five years. No Mediterranean shipping magnate has expanded his empire to such an extent as this Australian family. What does this Government do about it? It controls and freezes the wages of the workers while this family, which has increased its wealth to such a fantastic extent, is not subject to any kind of control. Let us hear what the financial editor of the " Sydney Morning Herald " had to say on 30th November, 1960, about the take-over of the Farmers organization -

The " effective cost " to Myer is an issue of £2.8m. of its own share capital (paying 16J per cent, dividends), plus £l.lm. of 7 per cent, notes.

The annual servicing cost of about £544,000 on these securities compares with Farmers' and Western Stores' last combined profits of about £800,000 on the ordinary capital.

Then follows the significant comment: -

Once again, the magic of the share market premium makes a huge paper price very economical to the purchaser.

We have this gigantic financial empire creating its own capital, and although this Government has the power to control capital gains it does nothing about the matter. It controls the workers, but it does not control these monopolistic interests that are building up their empires day by day.

Those are the two issues I wished to raise. First, we must control foreign investment in this country, and secondly, we must ensure that the monopolistic capitalists, who are bleeding the country's economy, are brought under control.

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