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Wednesday, 20 May 1970

Mr TURNER (BRADFIELD, NEW SOUTH WALES) - Yes, there was plenty of fog involved. No small print, but plenty of fog and plenty of generalities. The great debate went on. The Bill was explained at 12.25 p.m.. A question was asked by an honourable member from this side of the House. That took 2 minutes. Then, the honourable member for Lilley had the opportunity to say something for 10 minutes, speaking after 1 o'clock when most members were feeling rather hungry.

Now, that was the full debate in the Government Party room. Now everyone knows how we introduce legislation into this House. A special Party meeting was held after the Bill had been introduced. We had been promised we would see the small print. We saw no print, large or small. But there was then a special Party meeting - yes, indeed - on Wednesday, 13th May, after the whole thing was a fait accompli and the Bill had been introduced into the House. Debate ensued on Thursday, 14th May. That is the history of a great piece of legislation. It is perhaps the most important piece of legislation to be introduced this session. That is how it came lo the Party and to the Parliament.

Then we had the second reading speech. May I say a word about the way these things are done in slightly more mature communities. I refer to the Parliament of Westminster upon which we falsely claim that wc base ourselves. There, it is usual of course to introduce important changes in policy first of all by way of a report by some kind of an expert committee that sorts out the facts and the principles involved, analyses the situation and perhaps reaches some conclusions which the Government may or may not adopt, giving its reasons in a White Paper which is laid on the table and published long before any debate takes place in the House. Then, at last there is debate in the House and that debate is informed. I have mentioned already how informed this side of the House was on this Bill. The Opposition, of course, had no information at ali until it received the second reading speech. 1 wish to say a word about the second reading speech before I finish.

I have taken out some facts by way of illustration of the work carried out by committees of the British Parliament in the last 2 years or 3 years. The Fulton Committee reported on the reorganisation - basically and fundamentally - of the English Civil Service. The Pilkington Committee reported on broadcasting and television, their structure and what ought to be done about them and how far the Government ought to go with them. The Plowden Committee and the Duncan Committee reported on the reorganisation of the British Foreign Office. The Radcliffe-Maud Committee reported towards last year on the radical restructuring of local government in England. Local government there is pretty much what the State government is here. These are just some examples of the activities of British committees over the last 2 or 3 years. This is not what happens in the Australian Parliament before a Bill is introduced.

We had the second reading speech delivered by the Minister for Trade and Industry. I want to speak about the second reading speech because it is our sole source of information, apart from what we may piece together if we are as assiduous as ACMA was. The prime object of this Bill is alleged to be to ensure adequate Australian participation in the exploitation of Australia's natural resources. Yet there was no analysis of foreign investment - none whatever. A few figures were given indicating that this is the way the wind is blowing, perhaps, if we accept those figures. The honourable member for Lalor (Dr J. F. Cairns), who led for the Opposition, produced some figures of his own, or rather some figures that had authenticity, but he had to quote them. They were not given by the Minister. The honourable member for

Lilley quoted other figures. They are in Hansard. The honourable member for Balaclava quoted other figures. But why should these honourable members be giving figures? Surely it is the duty of the Minister and the Government introducing an important piece of legislation into the House, having the possession of these matters as none of us have them, having in the files of their departments these figures, to produce this information. Surely that is the duty of any government and its Ministers in anything but a hick republic. But did they? Not at all! AH we had was the second reading speech by the right honourable gentleman in which he gave a few spot figures showing the way the wind was blowing.

No review was given of prospect of Australian participation. We have heard about these great enterprises that are to be capable of competing on a world scale throughout the world. We have 2 such enterprises, perhaps, in this country - Broken Hill Pty Co. Ltd and the Colonial Sugar Refining Co. Ltd. I think that they perhaps are the only ones. What are these other great enterprises that are to be built up to compete on a world scale? What are the prospects of Australian participation? I suggest that mainly the Australian equity participation will place Australia in the position of a very junior partner. Was there any appraisal of what were the prospects of Australian capital in these vast enterprises that are to operate throughout the world? At least we should have had some appraisal of our prospects. But we had nothing. We have no analysis of methods used by other countries in meeting this problem of overseas investment. We have not asked them: 'What do you do about it?' No. We have just a flat statement that the AIDC is the answer. Yours is not to reason why. We have no analysis of what anybody else does. This is it. Ipse dixit! The Minister said it himself. That is it! No, the second reading speech which gives us this full knowledge and information which elsewhere might be given in a White Paper.

No information is given regarding the success or failure of the guidelines policy laid down by the Prime Minister some little time ago. This policy was supposed to induce foreign investors in this country to allow Australia to participate in equity capital. Has it succeded? Has it failed? To what extent has it succeeded or failed? Do we hear anything from the right honourable gentleman? Not a word! Then there was said to be a gap - you know, we do not have any institution that is capable of providing Australian capital on the scale required for the purposes involved. There is a gap in our financial institutions? We have no institution capable of doing this sort of thing.

Where is the gap? Has it ever been identified? Not a word about it. The gap in the Australian investment scene, as the right honourable gentleman put it, is not identified. Does this mean that there is a gap and that it is a gap that relates to, say, the riskier business - those things that cannot get finance in the ordinary way or through the Australian Resources Development Bank? The Minister does not say whether it is risky business or what it is. When the Australian Resources Development Bank was established we were told all about the investment gap. But there is nothing here about what the gap is that has to be filled. All we are told is that there is a gap and that it must be filled - by this means. That is all. The right honourable gentleman said:

It will assist where the development would not otherwise take place.

What is that? The risky business? Or what is it? I do not know. He does not tell us.

No reasoned case is presented as to how the Australian Industry Development Corporation can get fixed term capital overseas that the Australian Resources Development Bank cannot get. There is what the honourable member for Lilley referred to, that is, a confluence of objectives. We are all seeking to do the same thing - and both the AIDC and the ARDB are trying to do precisely this. That is, to get fixed term capital overseas on a large scale for investment in Australia. There is a confluence of objectives. Why is it that the Australian Resources Development Bank cannot successfully do the job that is required? Why is the Australian Industry Development Corporation the only institution that can do it? Where is this gap? Both institutions, of course, are backed by the Government. Do not let us have any nonsense about this. The AIDC, of course, is backed by the Government.

An honourable member earlier in the debate this afternoon made this point and there is no need for me to elaborate on it any further. Of course, if the institution was not able to pay its debts or if it failed the Australian Government would have to back it up, otherwise Australia's credit standing would be finished. Consequently both these institutions have backing from the Government. What did the right honourable gentleman mean when he said:

It must seek to enable Australian industry to conserve our foreign exchange by competing with imports without recourse to high tariff barriers.

What does this mean? It is rather enigmatic. Does it mean that this Corporation will assist Australian industries so that they can be better organised to meet overseas competition? This has nothing to do with exports. What is intended here? Is this intended to be a kind of rationalisation of Australian industry? Unless that is what the words mean I cannot understand them. It is said that money is to be made available by this Corporation to Australian industries to enable them to compete better with foreign imports. What else does it mean? Again the right honourable gentleman said that this Corporation will 'promote trade and commerce between the States'. What does he mean by 'between the States'? Does this mean perhaps that there is some raw material in one State and it is proposed to process it in another State in order to develop some fancy plan of decentralisation in that other State? Will it be justified on that ground? I do not know.

We have not been told what is meant by the words 'promote trade and commerce between the States'. What is the meaning of this odd phrase? It is like the earl'ier phrase that I mentioned. The right honourable gentleman also said that the Corporation may further the development of Australian resources necessary for the defence of the Commonwealth. Let all patriots spring to attention. Does this mean, for example, that we should promote cotton growing on the Ord so that it can be used to make canvas for tents for soldiers? What does it mean? Can this be a cloak for heaven knows what kind of operation? Maybe that is a foolish example, but I am just wondering what wilt be brought in under the cloak of a defence industry. There is scarcely a reference to the. ARDB. There has been no attempt to distinguish it or to show why it cannot do the job. No details have been given of cases where applicants to that bank have failed to get loans or where it has not been able to command sufficient resources. I think from memory it has loaned something like $260m, which is a fairly tidy sum.

We have not had a single word from the Treasury about this. It is said that this Corporation is not a bank. 1 should have thought that this was a matter in which the Treasury would have some interest. Are we not entitled to be told what the Treasury thinks about it? We have not had a word from that quarter. Then there is the vagueness of the Bill. There have been nothing but exhortations. We have seen nothing that is really laid down in black and white and nothing that is really enforceable. All we have had are vague exhortations. I have already mentioned that this Corporation is to get its funds principally from abroad, whatever 'principally' may mean, lt must aci in accordance with sound business principles. What does this mean? A sound business, presumably, aims at a profit. But there is no suggestion in the Bil1] that the Corporation is to aim at making a profit. Is this a sound business principle? There is no mention of the amount of the profit.

What about the other competing instrumentalities, such as the airlines and so forth, which have to make profits that arc laid down as an objective. The right honourable gentleman also said that the Corporation is to be subject to taxation. Taxation on what? If it does not make profits there will be no taxation. What about the income that it derives from its $)00m capital? It does not have to pay any dividends. It does not have to pay anything to the Government. So presumably, it will get interest on the investment of its capital. What does it do with this? Perhaps it starts a defence industry. Who knows? Perhaps it will promote trade between the States. Who knows? The Minister for Trade and Industry also said that it must divest itself of equities. How much equity and when? Once a year it is to have a kind of stock take, and if it thinks fit it has then to divest itself of equities.

The Corporation is subject to the Reserve Bank regarding domestic borrowings in any one year. There is nothing said about the interest rates that are laid down by the Reserve Bank for other institutions. Supposing that the Corporation happened to borrow overseas at a particular time an amount of $100m or $200m and that this suddenly arrived in Australia and the expenditure of that money made demands upon resources in this country at a time when those resources were already overstrained, so that an inflationary situation developed. This is the grandest of all marginal institutions. We have heard a lot about marginal banking institutions, but what about this colossus which is not under the surveillance of the Reserve Bank? The Minister also said that there are safeguards. I mentioned that the bank shall nol provide assistance except at the request of an applicant. I have already made reference to this and I need not say more.

Then there is the matter of the appointment of directors. The remuneration is to be fixed by the Governor-General; in other words, by the Government. This is very odd. Maybe you can or you cannot get somebody at a given figure. Is the GovernorGeneral to fix a different remuneration for the succeeding director, having already fixed it for the first one? Judges receive fixed remuneration to protect them from bias. But in relation to the directors of this Corporation the remuneration is to be fixed by the Governor-General. The amount paid to a director who is appointed at this stage may vary from the amount paid to a director appointed in 3 years time. There is to be a tenure of something between 3 years and 6 years. Who says that the Government will have no influence on the directors? Of course they will all bc splendid fellows but as time passes less splendid fellows may be appointed. Who knows?

We hear that this Corporation is to be free from Government interference. This is set out splendidly in the plainest terms. There is a body called the Tariff Board. Attempts have been made by the right honourable gentleman who introduced this Bill to intimidate it again and again. Wc all know that this is a fact. The Tariff Board, of course, is free from Government interference - if you cannot intimidate it. The Reserve Bank board is free from Government interference too. Do not we remember a little while ago when the Prime Minister and the right honourable gentleman went to the Bank Board and told it that it must reduce the rate of interest on overdrafts for rural producers? So what is the value of a guarantee that a Board shall be free from Government interference? These are 2 cases within recent memory. As- may have been inferred, I am against the Bill.

Mr DEPUTY SPEAKER (Mr Lucock)Order!The honourable member's time has expired.

Sitting suspended from 6 to 8 p.m.

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