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Thursday, 9 December 1971
Page: 4623


Mr Hayden asked the Treasurer, upon notice:

(1)   Can be supply details for (a) the early 1930s,

(A)   between the early 1950s and the early 1960s

(B)   between the early 1960s and the latest year available and (C) over the whole of this period and- (iv) (A) the volume of money supplied from overseas for the activities of these merchant banks and (B) the proportion this represents of the total:

(2)   Can he also supply details of the number of merchant banks subject to foreign ownership control of (a) less than 25 per cent,- (b) 25 per cent to 50 per cent, (c) 51 ner cent to 75 per cent and (d) above 75 per cent for each of the periods mentioned.


Mr Snedden - The answer to the honourable member's question is as follows:

It is difficult to provide precise ' statistics on merchant banking type companies in Australia because of the lack of a standard definition of the' term 'merchant bank' and because of the rapid growth in the number of companies operating in this general ' area over the last few years.

These companies usually provide a broad range of financial services including accepting and/or discounting commercial bills, receiving short-term funds and providing or arranging short or medium-term finance. They may also underwrite, sub-underwrite and arrange issues of securities for other clients; they may provide advice to companies on re-organisations, takeovers, and reconstructions; some may also provide portfolio management services. However, it should be noted that some of the companies which provide the full range of activities described above do not call themselves merchant banks and this adds to the difficulty of collecting meaningful statistics. - These problems of definition were outlined by the Deputy, Governor of the Reserve Bank in the 1971 G. L. Wood Memorial Lecture given recently, but some attempt was made in that address to indicate in very broad terms the number of merchant banks active in Australia, their total assets and the degree of foreign ownership.

Against the foregoing general background, the answers to the specific questions raised are as follows: (1)(i)

 

(ii)   Not available. However, the Reserve Bank has provided the following information on total assets of 'development finance companies'. The Bitter class of company comprises mainly companies operating in the merchant banking field.

 

(iii)   On the basis of the figures shown in (ii) above, approximate compound rates of growth per annum are:

 

(iv)   The Acting Commonwealth Statistician has advised that, for those companies referred to in (ii) above,the inflow of funds from overseas in 1969-70 from both 'direct' and portfolio' investors was approximately $18m. Information is not available on the proportion this represents of the total volume of money handled by these comapnies. Similar in formation on inflow of funds for the early l950's and early 1960's is not available.

(2)   Information is not available for the early 1950's and early 1960's. Based on published information covering 26 companies, the following approximate calculations of' foreign ownership proportions appear to apply at present:

 







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