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Wednesday, 20 May 1970

Mr JESS (La Trobe) (1:12 AM) - I do not care what the hour is or what progress has been made. I am concerned about this matter and would like some further information from the Minister.

Mr Daly - You should fight in the Party room.

Mr JESS - I thought the Parliament was the place to debate these matters. A point was brought to my attention by the honourable member for Macarthur (Mr Jeff Bate). I cannot understand why the Labor Party is not concerned with this point. Perhaps it can be put out of the way by a simple explanation by the Minister. As I understand it,$100m is to be made available. Whether it be $25m or $50m in 1 year I know not. But the Minister did say by way of interjection earlier in the night when the honourable member for Bradfield (Mr Turner) asked where this money would come from, that it would come from the Treasury. That means it comes from the taxpayer and that we are committing on behalf of the taxpayer$100m. Honourable members opposite should not try to divert me by referring to F111 aircraft. Let us settle this matter tonight.

We are not asking this Corporation to show any profit or to pay any dividend. The explanation given is that to keep it at arm's length we are not to ask it to pay a dividend or show any profit. The amendment merely says that the Minister each year should set a figure. It does not matter whether for the first year it is a nil return because we know it may not be possible to show a profit. With the other legislation we have said that in the first year no profit shall be expected. It seems to me we are giving away$100m. We are not setting any standard. We are not saying that the recipients have to be efficient or capable. We are not saying they have to invest wisely and well and that it will have to be proven and they will have to meet a standard. Again I come back to the fact that concerns me. What will the Opposition be able to do with an Act like this? The Corporation does not have to be efficient and can lend to any ratbag institution it chooses. I can well imagine we will have Uren urea, Cairns' left wing bookshop, Daly's dime stores, Foster's freight store. Nobody will have to report to the Parliament whatsoever as to the efficiency of these investments. 1 am not denying the Minister's good intent and the Government's good intent but it does seem to me that we are committing the taxpayers money but we are not putting any standard on performance whatsoever.

The CHAIRMAN - 1 point out to the honourable member for La Trobe that at the moment we are dealing only with clause 25 (a), the new clause proposed by the honourable member for Lilley. I think that the honourable member is enlarging a little on the subject, matter of the amendment^

Mr JESS - I am sorry Mr Chairman, but 1 am referring to clause 25 (a) which states that the Minister, with the concurrence of the Treasurer and after consultation with the Corporation, shall not later than I month before the commencement of each financial year determine the percentage of capital of the Corporation that would represent a reasonable return to the Commonwealth. I am saying that if this is not done there is no check on what investments are made; there is no control over the Corporation's efficiency; there is no standard set as to how capable or efficient it has to be. I am noi arguing whether it is Socialist or whether it is helping-

The CHAIRMAN - Order! The honourable member's argument is developing into the point that if this is not done then this, this and this could follow. This could be taken into almost any sphere that any member of the Committee would wish to take it. The particular matter before the Committee is in relation to the return to the Government through the Minister. The honourable member should keep strictly to the point of the return and not go to what could happen in certain circumstances.

Mr JESS - I am delighted with your interpretation. Mr Chairman, and am most appreciative, but can I ask this question: If this amendment is not carried and if no dividend has to be paid or a profit shown, what happened if the Corporation's investments are made most inefficiently and there is considerable loss?

Dr J F Cairns (LALOR, VICTORIA) - A point of order, Mr Chairman. I direct your attention to another clause in the Bill which covers adequately the kind of question that the honourable member is asking. It is clause 8. If he was not here and did not notice that, that is his fault. What he is saying now is relevant to clause 8(1.) and (2.) and should have been said then, not now.

Mr JESS - I think it is relevant to clause 25 also. Surely I can choose which clause I wish to speak to. Is the Labor Party running the House now?

The CHAIRMAN - As 1 have pointed out, the honourable member in speaking to the amendment moved by the honourable member for Lilley must not go outside the matter covered by the amendment. The subject matter covered by the amendment is the financial policy of the Corporation reporting to the Minister with the Treasurer.

Mr Uren - I raise a point of order, Mr Chairman. The honourable member asked: Is the Labor Party running the House now?' That is a reflection on the Chair and I ask that the honourable member withdraw those remarks.

Mr JESS - If it is considered to be a reflection on the Chair I withdraw it. I intended it as a reflection on certain people. I will conclude by saying that if the investment of $ 100m of the taxpayers money is nol considered to be sufficiently important that some control or restriction should be placed upon it, I agree with the amendment and I think we may well regret the day.

Mr SINCLAIR(New England- Minister for Shipping and Transport) {.I.IK a.m.] - Without going into clause 8 and the earlier provisions of the Bill (et me assure the honourable member for La Trobe (Mr Jess) that in terms of this proposition the SI 00m will not be invested until such time as the provisions of clause 24, setting out when and under what circumstances the second $50m will be available, are met. In any event there is a specific requirement that only that part of the Corporation's borrowings which are attracted in terms of the security as a result of this ultimate SI 00m will be used for the purposes of the Corporation. Accordingly the funds which it is intended the amendment should refer to are substantially not those which are directed to the Treasury but those which are directed as a result of the borrowings.

Mr Jess - What if there is a loss?

Mr SINCLAIR - In those circumstances certainly there would be recourse to the capital of the company. Let me say, firstly, that the Government does not accept this amendment. Let me say, secondly, that the reason the Government does not accept this amendment is that its purpose is to increase substantially the extent to which the Corporation will find itself in a position of having to return continually to the Government in order to increase its capital. As it exists at present the Corporation is so devised that, by virtue of the continued increase in its reserves, it will be able to increase its borrowing limits and so expand. During the course of the debate earlier we considered the full extent of overseas money coming into Australia. In the last few years we saw it as being of the order of $ 1,000m. As it is designed at the moment the Corporation can have at the maximum a 5 to 1 borrowing ratio on a capital of $100m, which would give it $600m when it is ultimately of that size. Unless the Corporation has a capacity to grow it will continue to be in a supplicatory position to the Government and to the financial allocations of each Budget. If it can grow it can be kept at arm's length from Government control. Accordingly, I do not believe that this chamber should support the amendment.

Proposed new clause negatived.

Remainder of Bill - by leave - taken as a whole.

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