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Wednesday, 9 March 1966

Mr WENTWORTH (Mackellar) . - I would like to make two points in connection with this Bill. I share to some extent the disquiet of my friend, the honorable member for Mitchell (Mr. Irwin), in regard to the selection of the type of aircraft involved. I do not want to go into this matter in detail: I am not competent to do so. But I do remember that TransAustralia Airlines, for example, was not allowed to select certain aircraft that it wanted. Because of decisions made in the pas:, it may well be that the needs of standardisation now require T.A.A. to take aircraft which are not really the ones that it would have chosen. It opts for them now because it has to keep in line with the fleet that was chosen for it in the past. ] shall not go into this matter in detail. As I have said, I am not competent to do that. But I do share the disquiet which my friend, the 'honorable member for Mitchell, feels in regard to this matter.

I would like to make one further point. Here I find myself at some variance with the honorable member for Scullin (Mr. Peters). I say " some variance " because, to some extent, I agree with what the honorable member has put forward. I think as he does that the degree of dependence upon overseas investment in Australia is unhealthy. I would like to see it cut down. But it can be cut down only if we can improve our own balance of payments position. While we are overspending, as we are at the present moment, on current account, we have to make good the deficiency on capital account just as a firm would have to raise debentures to cover its own cash deficiency in similar circumstances. I agree with the honorable member for Scullin that we should be taking measures here and now to reduce the deficiency on current account. But I do not agree with him - I think this is a point which has escaped the honorable member - in regard to this type of loan. It would be quite unrealistic, especially in this time of drought, to think that the Australian economy could balance its current account overnight. It cannot do that. It will be dependent on overseas capital for some time. I agree that we should try to cut down this dependence.

But it is unrealistic to think that we can eliminate it with the stroke of the pen.

We can take the incoming capital in one of two forms. We can take it either as a fixed loan as this Bill proposes or we can take it as an equity investment, which is selling to people overseas real things like firms, mineral deposits and real estate sites. 1 very much prefer that if this capital is to come in it should come in as fixed loans. It is very much better, since we have to get this capital anyway, that we should be raising loans overseas in terms of fixed amounts rather than that we should be selling Australia's real assets. For that reason, I do not think I can go along with the kind of amending resolution which has been moved by the Opposition. It seems to me that while we should .be doing much more than we are doing to reduce our dependence on overseas investment, we cannot eliminate this dependence overnight. As we need some overseas investment, therefore, we should be taking as much as we can in terms of fixed loans and as little as we can in terms of equity, namely, the selling of our real Australian assets and the title to them. For that reason, as I say, I welcome what has been done in this regard.

If the House will look back into history it will see that until fairly recently most overseas investment flowed into Australia in terms of fixed loans. A reversal of this general pattern took place 20 or 30 years ago. Since that time, most of the overseas investment in Australia has flowed in in the form of equity. This is, I think, a deterioration. This is a change for the worse. I believe we should get back to the traditional pattern. If we are dependent on foreign capital, as we are, we should be raising much more of our needs in terms of fixed loans from overseas and raising much less of our needs in terms of equity - the selling of the title to the real things of Australia. I shall not go into the figures in this regard. I simply say that the House should be encouraging the raising of loans overseas as the less disagreeable course because the disagreeable alternative is the selling of equities overseas. Indeed, the one reason why I think we are entitled to raise loans overseas, and our one real claim on the overseas fixed loan market, is the fact that we are taking in a large number of immigrants. We are required to build up the capital resources which are needed to employ them, to house them, and to give them transport. As a great deal of this expenditure - not all of it, but a great deal of it - lies in the governmental sphere, I think that the Australian Loan Council might be turning its attention very much more to loans overseas. I reiterate that I should like Australia to adjust its trade so as to reduce its total dependence on the inflow of foreign capital. But while that dependence exists, let us take this capital in the form of fixed loans as provided in this Bill rather than in the form of the selling of Australia's equities.

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