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Wednesday, 20 May 1970

Dr J F Cairns (LALOR, VICTORIA) (12:15 PM) The Australian Labor Party opposes the 2 amendments moved by the honourable member for Lilley (Mr Kevin Cairns). The second proposed amendment to clause 8 asks for the addition of the following words at the end of sub-clause (2): and that the company has made every reasonable attempt to secure assistance at appropriate rates from banking or financial institutions usually engaged in such type of arrangements and without success.

The Opposition would hope that this Corporation would not always be a lender of last resort. It hopes that in some cases it will even be a lender of first resort. But knowing that the Corporation is going to be borrowing money overseas and elsewhere at high rates of interest it is very unlikely that it is going to be a lender of first resort. The Opposition thinks there are enough restrictions on the Corporation already without providing any more. 1 think the second amendment could come only from a person who, whether he knows it or not, is a spokesman for the existing lending institutions. The Australian Labor Party is the spokesman for people who need to borrow money, people who do not have money. The honourable gentleman who moved this amendment can only be a spokesman for those who arc lending money. He wants to restrict competition. He is not an advocate of competion. He is trying to restrict competition and in effect he is saying: 'Look, here is a corporation which could compete with some of the banks. 1 think that is a bad thing.' Well, 1 think it would be a good thing to have most of the banks more effectively competed with than they are at present. If this Corporation could give the banks a bit of competition at least in the fields defined it would be an excellent thing in the public interest. I have no time for the spokesmen for the private financial institutions who have found their way into this House.

The second point raised by the honourable gentleman was the matter of control. He says he wants control denned at 15% of the shareholding. Control can be exercised and is exercised in the case of many so-called private corporations with much less than 15% of the shareholding. In some cases the controllers of big private corporations may have only 1% or 2% of the shareholdings. They are able to hold control because the rest of the shareholding is distributed among tens of thousands of people who have no way of competing against these professional managers whose control is based on a very small percentage of the shares. I agree with the Minister at the table, the Minister for Shipping and Transport (Mr Sinclair) that the powers of the Corporation are already seriously limited - limited too much - by clause 8 (3.) (a) which says: (3.) The Corporation -

(a)   Shall not provide assistance to a company except al the request, or with the consent, of that company.

Clause (3.) (b) is a similar kind of clause. I would like to see the Corporation able to go out and search for business and not be restricted, as those clauses restricted it, to assisting companies which come to it for assistance. Why should it not go out and give the other lending institutions a bit of competition? Are not honourable members on the other side of the House advocates of competition? Does not the honourable member for Wakefield (Mr Kelly) consider himself an advocate of competition? Does not the honourable member for Lilley consider himself an advocate of free enterprise and competition? Yet honourable members opposite have spoken tonight in terms of restriction. They fear that this Corporation will provide competition for some of their friends - though I am sure they are not really their friends, because I am certain that very few of the honourable members on that side of the House are in any way friends of the people who control the big financial interests. They may identify themselves with them, and they may think it is very nice to identify themselves with them, but I am quite sure they are not in any way friends. These people are in a much higher firmament than the honourable members opposite who have spoken. 1 think clause 8 (3.) (c) should be read in conjunction with clause 8 (4.) (b). I hope it will be the intention of the Corporation to read these provisions together. Clause 8 says: (3.) The Corporation-

(c)   shall ' endeavour, so far as practicable, to avoid becoming or remaining in a position where it is able to control or manage the affairs of a company . . .

As though it would be a terrible thing for the Corporation - a large public body set up by the Government which is supposed to represent in some way the will of the people - to exercise any control over a company which does not in any way express the will of the people. It must be read in conjunction with sub-clause 4 (b) which states:

The Board is satisfied, as to any of those shares, that retention of the shares is not necessary for the proper performance of the functions of the Corporation.

I would expect the Corporation to take that into account. From time to time it will be inclined to say that it is necessary for the Corporation to retain its shares so as to ensure the proper performance of the functions of the Corporation. I am sure that under a government drawn from this side of the House which is seeking to express the public interest through the will of the people, we would want the Corporation to retain shares in some companies to ensure the proper performance of the functions of the Corporation as set out in sub-clause 4 (b). I do not assume that the Corporation is getting powers now. The Minister interjected when I was speaking to say that he did not intend the Corporation to come in quickly and sell out quickly. I hope that this is not the intention of the Minister or the function of the Corporation. I submit to the Committee that it would be necessary from time to time for the Corporation to hold its interest for a considerable length of time to ensure its proper functioning.

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