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Thursday, 14 May 1970

Dr J F Cairns (LALOR, VICTORIA) - On anyone's standards this must be conceded to be a very interesting and very important Bill. Even if one can see beyond the sectional interests that may be involved - and one may feel genuinely that they have served a very useful purpose in the past - one has to concede that this Bill represents a very important development in the provision of finance for Australian industry. I would like to congratulate the Minister for Trade and Industry (Mr McEwen) on the work that has gone into making this Bill possible and also to congratulate those who have been responsible for drawing it up.

Australia has a serious economic problem that arises out of our balance of payments position. It is a problem that sooner or later we will have to grapple with and which will present us with considerably more difficulty than we have faced in recent years. We also have constitutional difficulties which on the whole have not assisted Australian economic development and have not assisted our surmounting of those problems when they have arisen. I think this Bill goes some of the way towards establishing an institution that can help us with the economic problems, andI congratulate those who have been responsible for drawing it up because I think they have shown an appreciation of the constitutional difficulties that an institution of this kind faces. I think the Bill is well designed in relation to those constitutional difficulties.

The Bill is described as one to establish the Australian Industry Development Corporation. It is really a Bill to assist the development of commerce between the States and between Australia and other nations. It is a Bill that has an economic purpose but it operates within a constitutional field thatI would define in that manner. Firstly as to the problem: The Minister for Trade and Industry did not, in my opinion understate the significance of the problem. I hope that his statement of the problem - I think I can make mine stronger and I propose to do so - will not escape the attention of those who have lived in affluence and apathy for far too long; who have been inclined to believe that this lucky country can go on being lucky in all circumstances and under all conditions. That is hardly a viewpoint that I would expect the economic and political pachyderms who inhabit the benches opposite to accept readily. I think they of all people should be prepared to do something now to help to alleviate the difficulties that may well come and may well help to induce some of those political and economic problems about which they would be very unhappy and which would lead to their principles being the first to go if those problems become as intense as they may well do.

In defining the problem the Minister in his second reading speech said:

It is, however, a basic feature of our developing economy that, as the gross national product increases, so do our import requirements to sustain our industries and meet consumer needs. We face a growing burden of income remitted abroad. Income remitted overseas by companies in Australia has in 5 years risen from 8.3% to 10.5% of our export earnings. In addition, income being earned by overseas investors and ploughed back in further investment in Australia has more than doubled in 5 years. This means a building up of commitments for further income to be paid abroad in the future. And, where the investment is in equity form, there is no end to the commitment.

That is a strong enough statement and in statistical terms the strongest part of it is that income remitted overseas by Australian companies is rising quite rapidly. It has risen from 8.3% to 10.5% of our export earnings in a short period of 5 years. But if anything the problem is more serious than that. The problem may be seen in any examination of the balance of payments situation. I would like to refer the House to a recent statement of the balance of payments problem by Sir John Crawford, with the concurrence of honourable memAs the statement is in up-to-date terms, bers I incorporate it in Hansard, lt reads:


Sources: Commonwealth Bureau of Census and Statistics, Balance of Payments 1968-69, Table 29 and Balance of Payments, Quarterly Summary, December quarter 1969. For Level of International Reserves, Reserve Bank of Australia, Statistical Bulletin, June, 1966 and January, 1970.

As the statement will now appear in Hansard I do not need to go through it in detail but can simply refer to the trends which it indicates.

Mr Fox - We do not even know what it is.

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