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Thursday, 14 May 1970

Mr GILES (Angas) - I rise tonight to support this Bill. I find little wrong with it and the more I inquire the more it satisfies my idea of the aspirations of the Australian nation. The honourable member for Chifley (Mr Armitage) tonight tried to make great play on the legislation. He said, for insance, that 'it does not cover everything we want'. That would be the- understatement of the. century. Later on I hope to deal with protective devices that assure the independence of this Corporation and protect the Australian people from just what the honourable member for Chifley was talking about. He tried to make play of an alleged difference between the present Minister for External Affairs (Mr McMahon) and the present Minister for Trade and Industry (Mr McEwen). Of course, both of them would bring great lustre to the Austraiian Labor Party and I can understand why honourable members opposite have green eyes when they think of these 2 honourable members. People can call this Bill by any name they like to coin, depending on what they prefer to think. One can, I suppose, call it socialistic legislation; one can call it, as the honourable member for Chifley did, the McEwen Bank, or whatever you like. But this is the result of a Cabinet decision by this Government.

The Opposition so far has made great play of the fact that we are introducing this legislation at this point of time. May I just hark back to the days prior to 1949. Then the people of Australia voted out of power a government that was concerned with restrictive policies - restrictive policies in terms of banking legislation, restrictive policies in terms of petrol rationing and in general a complete distrust for the use of overseas funds for the development of Australia. It is quite wrong - I think this is well recognised in the community - for the Opposition to draw the inference that everything the Government has done in the past is wrong and everything it has been suggesting, quite often at the wrong time, is right. This would be incorrect. If we can continue the argument a little longer it will be realised that we have seen in this country in recent years the biggest growth the nation has ever experienced. Ours is one of the highest growth rates of any nation, and this has been brought about by the opposite of restrictive policies. I hesitate to think of some of the facilities that would be offered to the people in the community today if the conditions of those days prior to 1949 were still with us. One could readily imagine, for instance, one television station to each capital city; no television reaching into the outlying areas; this service controlled entirely by the Government; and other restrictive policies. One can imagine our situation if we now had the lack of faith in the public sectors of this nation which coloured the policies of the Government prior to 1949.

So it is no use the Opposition saying that our policies have been ineffective. On any judgment of growth and on any judgment of the facilities available to the people, the record of the Government has been excellent. But times change and nobody looking to the future would put forward policies that do not adjust themselves to that change. This as I see it is the very reason why this Bill is before the House tonight. The world today is closer and in many ways is tougher. In many ways I agree wilh most of the comments made tonight about the importance in the commercial scheme of things of big overseas corporations. But I do not damn all corporations. I think I will have time later to touch on the point that one of the aims of this Bill would be to get hold of corporations which seem to us to be somewhat big, but which are Australian-owned, and do something about helping them to set up dependent companies overseas with parent companies in Australia.

I am not particularly interested in the past. I am not interested in doctrinaire philosophies. I have not the slightest interest in what the honourable member for Chifley thinks the Opposition would do if it had this Bill to control. Of course, the time might come, regrettably for Australia, when it might have control and if this happens no doubt it will set up precisely the instrumentalities or corporations I suppose it has in mind. As I. said, the world is closer. Communications have improved to such an extent that we are not remote from the dealings of other nations: we are not remote from the dealings of overseas companies. I believe that one could substantiate a good case to support the view that this Corporation has a proper slot for its activities.

Perhaps I could lead now into our own situation at this point of time. I suppose we have heard people on the hustings say for years that Australia is on the threshold of real greatness and probably this becomes more true every time it is said. Tn spite of the high cost structure, at any rate in comparison with most new countries, and in spite of a tariff war, both of which have made the position of export based industries somewhat critical, the economy of this country has continued by and large to expand and produce proper facilities and proper services for the people of Australia. The overall Australian economic position is in great measure healthy due to capital inflow. The Government encourages capital inflow and nothing in this Bill would aim to detract from that. In fact, the effect of this Bill would be that we would get a net increase in desirable capital flow properly directed into this nation. We need this capital inflow. The Bill certainly docs not alter this position in my view.

The problem we have, as T think the honourable member for Lalor (Dr J. F. Cairns) said early in his speech and as we are all aware, is a deficit on current account. This is one weakness that one could perhaps look at and be mildly suspicious of in terms of the future of this very healthy economy in Australia at this time. We are though one of the few nations in the world which up till now has done very little directly to aid the flow of capital and its resources so that new Australian industries of worth and potential will be encouraged to become viable as rapidly as possible. We have over many years provided a lot of indirect help to industry and this has been responsible for a certain amount of growth. I refer particularly to the export incentive schemes, trade promotion, the Export Development Council, the Export Payments Insurance Corporation, general taxation provisions and general tariff provisions in some ways. At this point in our history I do not believe we have made a full impact. So we are faced tonight with a Bill which is an unusual one for the Government, an unusual one for this nation, lt aims specifically to help Australian industries with export potential.

I do not believe it is proper - perhaps other honourable members will disagree with me - to compare the Corporation with a bank. It will not be a bank, lt will not have the advantages of a bank nor will it suffer the limitations of a bank. In 5 years - a previous speaker disagreed with these figures - income remitted 'overseas by companies in Australia rose from 8. 3% to 10.5% of our export earnings. Although mineral earnings are up - what nonsense is made of the Vernon Committee's projections in this regard - and although our earnings from the manufacturing sector are increasing very much to our advantage, nevertheless our rural sector, has a growth rate of only 2% per annum. This is the sector from which, for many years, this nation earned its overseas currency. Whether we can improve our export earnings depends on many factors, not the least of which will be the capacity of the Corporation to bring some economy of scale into our manufacturing enterprises.

I think honourable members will realise that much of the advice that has been given to our industrialists, particularly over the last 18 months, has been on these lines: Before you come to us and say you need protection for a variety of reasons, we suggest you go out into the markets of the world - out into Asia, with the closing of the Suez Canal - and try to develop your markets'. Why has that advice been given? It has been given mainly for the reason that if they can develop new markets they should be able to produce an economy of scale by virtue of low unit cost. This is one very desirable aim of the Corporation. The Corporation will start in a small way, for reasons that are obvious to many honourable members, but in the future I see a great increase in export earnings from the manufacturing and mineral sectors of Australia through the action of the Corporation.

I am certain that its influence can extend to proper business principles, one of which is a realisation that a country like Australia, a great distance from export markets, must have regard to many factors. I have in mind industries which the economists of a few years ago called footloose industries - the type of industries that owe no allegiance to the economic laws that apply to most industries. They are no: industries concerned with bulky, high volume cargoes like com flakes. It may well be that the Corporation will be able to allocate funds, in an appropriate way, to businesses that have a growth potential based on small more technological articles such as electronic parts and watches and that have no allegiance to the same economic laws that apply to other industries which are faced with a high freight factor in respect of exports. I mention this because I believe that this type of thinking and this type of allocation of resources is one of the fundamental reasons for the development of the Corporation.

I hope that the Corporation will be managed by a fully qualified board of directors, because this is vital to the successful functioning of the scheme. It is not, of course, vital to the Opposition's idea of the successful functioning of the scheme. The Opposition would have the Corporation under direct government control. The Opposition would do away with the expertise of experienced men such as the honourable member for Moore (Mr Maisey) mentioned when he spoke of qualifications. So we differentiate very clearly between qualified directors and government control, government interference, the dead hand of a Socialist empire trying to dictate to this Corporation for its own political advantage.

We ses this Corporation quite clearly as having 2 full time directors. I will not go into their qualifications because they are referred to in the Bill and were mentioned in the Minister's second reading speech. I am not so interested in that so long as the directors are properly qualified. However I am vitally interested in the fact that the majority of directors of the Corporation should be properly qualified men of stature. I think the honourable member for Moore went much further than that. I hope to see on the board men whose names are household words - the Vernons the Simpsons, the Mcclellands, the Darlings - men of status and experience in their own fields. In my view, and I hope in the Government's view, the success of this scheme will depend completely on the quality of the part time directors.

I have only 1 or 2 minutes remaining to me tonight in which to delve a little further into what I imagine their job will be on a day to day basis. I am assured that they will not go out and look for business. They certainly will not be instructed by a political party to go out and look for business. Their job will be to implement the policies of the Corporation. In due course proposals will be put to the board of directors. Unquestionably they then will do 2 thingsthey will look to the viability of the scheme to see whether it has an interest for Australia and has export potential, but further than that they will look, I believe, at the interest bearing capacity of the proposal.

It is not my intention to throw names around nor probably would that be appreciated tonight, but I think it is well known to most honourable members in the House that a very prominent corporation in the mining field in Australia quite recently took out a short term loan at 12% interest. I imagine that the directors, when faced with a proposition like that, will ask themselves: 'Is this the kind of proposition which can bear this rate of interest and this kind of servicing of the loan?' If it is, they will grant the application. That is precisely the field in which members on this side of the House hope that the scheme will operate. The directors will not go out searching for business nor will they dictate what should happen to one firm or another. Instead they will sit back with their wealth of experience in their various fields of commerce, banking and economics and weigh up the scheme put to them properly and on proper business grounds.

If I had more time tonight I would like to develop the thinking behind this Bill in terms of the protective devices which will assure, as far as human mind can concoct them at this stage, that sound business principles will be brought to bear on every proposition which is put before the Corporation. Protective devices exist in a very real fashion. In passing I should like to say that many of us have had the advantage of putting in a great deal of time in terms of the implications of the Bill, and I hope to be able to develop some of my thinking on it at a little greater length on another occasion. The Bill is hedged about with protective devices to assure, as far as human mind can do so, that there is no government interference. That is not in accord with the Opposition's views because we know what its doctrinaire Socialist mind would do to the Corporation. That is the main reason why we should vote not only for the Bill but also against any amendments that the Opposition might see fit to introduce. I agree that this is a far sighted measure. I support it.

Debate interrupted.

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