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Tuesday, 27 April 1965

Senator WILLESEE (Western Australia) . - Mr. President, after listening to the tail end of Senator Branson's speech, I wonder whether the debate should continue. He said that we are holding costs in this country. We are holding costs! He could have fooled me, for one. He said that it is good news that the United States of America has taken the stand that it has and capped it by saying that the Treasurer (Mr. Harold Holt) is a capable man. If all those things are correct, I do not know why we are having this debate. The Treasurer seems to have belied the fact that he is a capable man ever since he took over the Department of the Treasury. If America's stand is good news, I do not know why the Prime Minister (Sir Robert Menzies) should have written to the

President. Senator Bransonsaid that we were holding costs in this country. Of course, we do not always accept statements made by Senator Branson, but if we accept this statement, it is hard to see why this debate should continue.

Senator Hannaford - Sit down then.

Senator WILLESEE - Senator Hannaford says that I should sit clown. If the honorable senator stood up a little more and had more to say when he did stand up we might have the benefit of gauging his abilities. I suggest to him that if we cannot have the benefit of his ability we should have the charity of his silence while I have something to say. Obviously America's action is serious for Australia. Otherwise, the second most important member of Cabinet would not be visiting America. I fully agree that he should visit America; that is the very place he should be tonight. If America's action were not serious for us, the Prime Minister would not be writing urgent letters to the President. The situation would not have arisen but for the Government's laissez-faire attitude of sitting and waiting until it is kicked and pushed into acting. The Government seems to have forgotten the meaning of initiative. Its electoral victories have influenced the attitude of Government supporters. Events are moving too rapidly in world politics today for that attitude to be adopted.

On 4th August 1964 the United States Senate passed legislation to introduce an interest equalisation tax. From the point of view of the United States, this action was taken for very good reasons. I have no quarrel with the legislation. I shall analyse it very briefly. I do not wish to go over those points that have been discussed here today, in the Press and by very responsible people, not the least of whom are members of the Australian Labour Party. The Leader of the Australian Country Party (Mr. McEwen) has very graphically said on more than one occasion that we are selling parts of the farm every year in order to live. That statement is so graphic and literally true that it ought to be understood by everyone.

This debate is taking place tonight because the United States has become alarmed at the outflow of dollars from that country to all parts of the world. Amongst the many actions taken is the one which I believe to be the most important - the legislation introducing in the United States an interest equalisation tax. That action has thrown some alarm into the Australian Government. Evidently Senator Branson does not share the concern of the Government on this point. It is not a new step and it is to the disgrace of the Government that it has been caught flat-footed. The Treasurer has been sent to the United States handicapped, with one hand tied behind his back. He has been placed in this position because Government supporters have refused to listen to even the most cautious questioning on the matter of overseas investment in Australia.

The legislation relating to an interest equalisation tax in the United States of America dates back to the late President Kennedy who first sent down to the parliament of the United Stales the suggestion that such a tax be introduced. Because of the way in which the American parliament and the American community work, it was not until 4th August 1964 that the legislation was passed. As 1 understand it, it ceases to operate in 1965 unless the President exercises his power to extend its operation. The necessity for such legislation arose because of the tremendous and unusual position that the United States has occupied in the world community since the end of World War II. Never before in history has there been such an outpouring of wealth from one country into other countries without any great reward or remuneration in return. The course of action of the Americans has been influenced by political purposes which are beyond the scope of this debate, but in terms of pounds shillings and pence on the balance sheet they have not looked for return or reward.

The interest equalisation tax legislation has been the subject of reports since 1963, mainly because it carried within it provision for retrospectivity, or retro-activity as the Americans call it. It has been of interest for a long period because of its effect on borrowings in the United States. At first sight, one is inclined to be fooled by the legislation. It is designed to raise the cost of borrowings in the United States by 1 per cent. To those of us who are tyros in the field of finance, 1 per cent, does not seem very much of an increase, but evidently it is quite a lot in the field of international borrowings. The legislation was introduced because the American Government believed that it would bring the cost of borrowing in the United States to about the European level, which meant that there would be no great advantage in borrowing from American sources of finance. Because of rapidly changing events in the world today, I always find it tremendously difficult to keep fully informed at all levels of international politics and finance. Countries we set out to help about 20 years ago - just after the end of World War II - today are lending to other countries. It is very difficult to think of a rise of 1 per cent, as representing a lot of money. But apparently it does represent a lot of money. The raising of the rate has been designed to bring the cost of borrowing to the European level in an effort to arrest the drift of dollars that has been brought about by all sorts of things, but mainly by borrowing from the U.S.A. Because of the peculiar type of debate we have in this place, I do not know whether the Minister will reply; but if he does. I should like to know whether, if the Americans are right in saying that this increase of 1 per cent, will bring them more or less to a state of parity with the other lending nations, particularly the European nations, it will affect Australia to the extent we believe and about which we are worried. I should like the Minister to indicate whether, if the increase of 1 per cent, in the borrowing rate on the American market will bring the position into parity with that of Europe, it would not be just as easy for us to get the money we need from the European market. Such a suggestion seems so simple, of course, that I do not fall for it. I repeat that I should like the Minister, who has tremendous resources of knowledge available to him, to give us some information on this point.

Senator Cormack - May 1 say for your information that, if I understand the situation, the dollar loan that is being negotiated at the present time is being taken up in New York mainly by European subscribers.

Senator WILLESEE - That is another thought. Money is flying back to the American market. This matter is so interesting that I should like to have a studied treatise on it presented to us.

Of course, the present situation in America is not new; it is the culmination of a series of debates on that country's balance of payments. We have been reading about it in all sorts of journals for a long period. We have read of appeals to tourists not to spend so much money overseas. Five or six years ago some restriction was applied to the importation of dollars by members of the American forces in Germany and their wives and families. Senator Fulbright made this graphic appeal: "If you intend to gamble, why not spend your money in Las Vegas rather than in Monte Carlo? " I do not know what Prince Rainier said in reply. In these things there are always two sides to the story. Senator Fulbright said, in effect: " After all, you are making the dollars in America. Why not spend them in America? " Over a long period an appeal has been made to the Americans to restrict the outflow of dollars by voluntary effort. The Great Five Hundred - banks and other financial institutions - have said: " We will voluntarily restrict our lending outside the American continent ". On top of all this, America has levied the interest equalisation tax in an attempt to restrict the outflow of dollars.

When we look at the recent decision of the President of the United States in that context, we realise immediately that the problem is vastly different from merely being one of American money coming to Australia. America has not aimed its recent action at Australia. As I have indicated, America's action has been directed to the outflow of dollars from that country and to her own balance of payments situation and has not been aimed particularly at Australia. I suppose if I were a Japanese or a Mexican I would view the position as would a Japanese or a Mexican if America's action affected either of those two countries. But being an Australian, I see Australia in the peculiar position of trying to plead a special case, at the same time realising that this action has not been aimed individually at Australia. If I were an American, I would certainly be worrying about the current situation in America, just as I would worry if the same situation arose in this country.

The countries chat subscribed to the Bretton Woods Agreement agreed that dollars and gold would be interchangeable. As a Western Australian, I am always interested in the subject of gold, even though I may not be interested in it in the same way as are other honorable senators from that State. During the 1920*s, after the First World War. America bought gold on all the world markets. A/though she was hoard ing gold, nevertheless she was giving great help to countries that had been ravaged by war. But after the Second World War a different set of circumstances obtained. America then started to pour her dollars into other countries, not only under the Point Four and Marshall aid schemes, but also in the form of investments. Then, as I was about to say earlier, we had the Bretton Woods Agreement under which the United States of America - I stand to be corrected on this matter by the purists - virtually set herself up as a world bank. She said she would buy gold at 35 dollars an ounce, or 3,500 cents as in the wording of the Bretton Woods Agreement. The purists might not agree that this was a banking activity, but it seems to me that America then took over a tremendously important function of banking and in effect set herself up as a world bank.

So after the Second World War we did not run into a world depression as we did after the First World War. Instead, prosperity bloomed. Many countries - West Germany and Japan immediately come to mind, but others enjoyed the same benefit - were brought into a state of prosperity because of the outpouring of American dollars. Then they started to send the dollars back to America to buy gold. That situation has been accentuated recently by the decision of France to hold a very small reserve of dollars and to buy all the gold she can possibly lay her hands on. The situation becomes alarming when it is observed that over a certain period about two-fifths of the reserves of gold have been haemorrhaged away from Fort Knox. The reserves have dropped from 25,000 million dollars at the beginning of the period in question to 1 5,000 million dollars at the time of the last survey about which I read. I may be a couple of years out of date. It is not unusual for me to be that much out of date; it is rather difficult to keep up to date with the latest figures. If my thesis is accepted, then in effect there has been a run on a world bank. It seems rather silly to say that if this state of affairs were allowed to continue America would be bankrupt. Such a statement would be ludicrous.

Now we have suddenly had thrust on us the decision of America to introduce legislation to deal with the balance of payments situation. Her leaders have appealed to tourists, to soldiers overseas and to the big business interests to impose voluntary restraint.' As any Prime Minister would do, the present Prime Minister (Sir Robert Menzies) has placed before President Johnson personally the situation in which Australia finds herself. He has drawn attention to the obvious features of the situation. He has pointed out that Australia is a large country, that we have great distances to travel, that we have a sparce population, that we are a great importer of capital and that we have to rely heavily on capital from overseas because of our immigration scheme. He has pointed out that we occupy a peculiar position in world affairs because of our situation in the Pacific area and that we are allied to America and Great Britain in very many ways. He has pointed out that America's action could have an adverse effect which would spread beyond the confines of Australia. The Prime Minister was not drawing attention to anything, that was novel or new - rather did he have a duty to do so - when he stated in his correspondence, which Senator Branson has quoted, that America has placed embargoes on the importation of our wool and minerals such as zinc and lead. The same sort of thing hangs over our head in relation to meat and sugar and other exports which are vital to us. I think it is something that this Government has not appreciated over the years. It was emphasised when it appeared that Britain would join the European Economic Community two or three years ago. It was then said: Unless we export we die. In past years there was a slogan: Populate or perish. I think today the appropriate words are export or perish. The incidents that occur in the international field bring home to us day by day how true that statement is. We have to realise that, when we put up propositions to the American people and to President Johnson the situation which arises is similar to that which arises with every law that is passed in Australia. When a law is passed people try to become exempt from its provisions, and as sympathetic as you might be, if you exempt them you defeat the purpose of your law. You just do not get anywhere.

I suppose that every honorable senator has realised that that is true of the call up for national service. I did not know that so many people were against the call up of young men until the authorities began to call them up. Perhaps some of them were the sons of people who now oppose the scheme. You pass a law and you think it is a good law. You realise, that it impinges upon the interests of certain people, but if you are sympathetic enough to try to help all of them, the law will' become completely invalid.

The Australian Government has never faced up to the question of overseas investment in Australia. Nobody in his senses would say that there should be no overseas investment in Australia, but voices have been raised concerning the problems associated with it over a long period of time. The Government has turned its back on the difficulties that could arise. Now the Americans have thrust them before us. In America today people are asking what the effect of the measures will be. Some critics say that they will have no effect and that it is a mere tampering with the situation. I do not accept that argument because I think the Administration would be aware of what it is doing. But if that is correct Australia is in even greater danger. If this law does not work and if the actions of the American President are not effective, obviously the Americans will have to resort to other measures which could be more severe. We may then be back here in a few months time debating a far more serious situation.

If there is to be a gradual slackening off and if there is to be a limit to which we adjust ourselves month by month or quarter by quarter, we shall not have a great deal to worry about. We are a pretty adaptable country and we will be able to adjust ourselves to the situation. But if there is a sudden brake, and there is the question of servicing American industrial organisations in this country, that will be a different state of affairs. I do not know that even the Government has accurate knowledge of the amount of overseas investment in Australia or the amount of money it is costing to service that investment year by year. I do not think the Government has that information because it has shut its eyes to this situation over a long space of time. It has always refused to inquire into it although it has been asked to do so by many responsible bodies in Australia. If the situation I have mentioned should arise, we will be in much more difficulty than we are tonight. If America achieves the effect that it desires, it will have a very marked effect on our trade and commerce in the international field. I do not think we can look at the United States as being merely another trading partner. Because of the peculiar and important situation that the United States holds in the world today, I do not think it is a question of the balance of payments between one country and another. Any action which the United States takes must have a marked effect in whatever sphere it operates.

We have seen the effect of its actions in the field of international affairs and in the field of finance. We must ask ourselves how the recent actions will affect commerce and trade over a period of years. I do not think there is any doubt that, having regard to the rip-roaring state of the economy of the United States, they could have a very marked and sudden effect on Australia, as well as on other countries. I think that you, Mr. President, will appreciate that this matter challenges the whole situation which the Bretton Woods Agreement established. By that agreement the United States became almost a banker. It guaranteed to buy gold at the fixed price of 3,500 cents and to sell it at the same price, leaving it open to the whim of countries to make use of that arrangement as they saw fit. In 1944 we could not visualise that countries such as West Germany and Japan would recover so rapidly and make such tremendous economic . progress. If we look back over the years we see the thrilling expansion that they have made. In .1944 it was not possible to visualise that West Germany or Japan would recover so quickly or become so important in world affairs.

Senator Henty - Where did they get their capital?

Senator WILLESEE - I think the honorable senator is agreeing with me that their capital originally came from America. Now there is the reverse position. They are buying gold from America and using, as it were, the result of the dollars that America sent them, to do so. The Americans are placed in a very vulnerable position. The recent action of the United States may lead to all sorts of interesting situations of which we are probably not aware today. Let us consider the position of the International Monetary Fund and the World Bank and the countries which they were set up to help. I suggest that it might be better now to establish a fund for which many countries would provide capital. This may be the time to begin to relieve America of" the necessity of providing funds for international projects and for many other countries to subscribe to a common fund.

The situation that we are facing now may recur in six months or some other period because of the outpouring of dollars. I have dealt briefly with the general situation and the reasons which prompted the Prime Minister to write to the President of the United States. I entirely agree that Mr. Holt should visit the United Slates. Senator Branson seems to think that there is not much for us to worry about.

Senator Branson - I said I am optimistic.

Senator WILLESEE - 1 do not think thi honorable senator is optimistic; I think he is misty optic. I come to the whole question of foreign investment. Over the years the Government has been content to let sleeping dogs lie. Like Micawber it hoped that something would turn up. After all, responsible people have been hammering at the Government's door in connection with this matter. The Chambers of Manufactures play a big role in the Australian economy, and they have been complaining of this situation. The Deputy Prime Minister (Mr. McEwen) has said some very definite things about it over a long period of time. Although the Government does not often listen to the Australian Labour Party, that Party has set up special committees and has published papers on the subject because its supporters realised that there was a situation occurring which could be dangerous for Australia. We have mentioned the difficulties that could arise in connection with overseas investment in Australia. We have never challenged it. As I said earlier, nobody in his right senses would suggest that a young and expanding nation should not go out and get what it needs. It is pretty obvious that one of the post-war problems in Australia was to get hold of men, materials and capital. This is an old problem that has arisen in all economic circumstances since time began. We went after men by embarking upon a great migration programme. I suppose if the figures were taken out it would be shown that our immigration programme was greater than that of America at the time when most people were migrating to that country. I think that pro rata our effort has been greater thai that of America. This policy has been carried on by successive

Governments and successive Ministers almost without challenge. We have all agreed that people must be poured into this country because we have not the manpower and material to develop it and to build it into the great nation that we know it will be. We have never said that because we have not the materials in our own country we should do without them. If we have not had the knowhow, we have imported it. In trying to get the men that we need, it seems now that we have not done well enough, particularly in my own State, Western Australia.

We have sought materials and capital. Because it has been impossible to find these in our own country, we have moved outside our own borders. We have encouraged immigration because we knew that from our own resources we could not encompass the building of a great and powerful nation, particularly in view of oar international responsibilities and our peculiar position in the Pacific area. If we did not bring capital from outside Australia we would have to reduce our standard of living and our rate of development. Even then, we would probably find that our capital was completely inadequate to maintain minute development and a humble standard of living. There has never been any argument about the fact that we ought to bring in capital from overseas.

After all, in bringing in capital from overseas, what did we do? We said that we were going to race ahead with the development of this great country in this generation but that future generations would have to bear some of the burden. As critics of the Government, we have said that it should have been doing this more intelligently. If proper cognisance is taken of the way in which this capital is dealt with, when our children and grandchildren face up to the burden that we place on them the burden will be pretty well non-existent. If we employ the capital in the way in which capital can be employed today, with the benefit of the tremendous knowledge that science and education have given us, the burden will not be very great; it will be almost negligible.

The crux of the matter is not whether we should get capital from overseas. Nobody to whom I shall ever listen has ever challenged the need to do this. Obviously, it is as necessary to import capital as it is to import men and materials. We say to prospective immigrants that they must measure up to certain standards. We are the receiving nation and we say to them that they must have certain standards of decency and they must not have criminal records. We say that they must have certain standards of health and hygiene. In relation to immigration from southern European countries, we have been even harsher. We have stopped migration for a certain time and we have restricted migration to certain classes of people. I suggest that an attitude akin to that should be applied to capital. All of this has gone on for a long period. Nothing that I am saying is original or new. The United States of America has thrust this situation on our plate. I regret that this Government must have things thrust onto its plate. It has grown a little lethargic because of the unwisdom of the Australian people in continually re-electing it. It has lost initiative. The Government does not appreciate the tremendously important situation in which Australia is today. This matter has been thrust onto the Government's plate. All that I do tonight is to plead with the Government not to put a serviette over the plate and have it taken to the most remote kitchen that it can find, never to look at it again. I sincerely hope that when the Treasurer is pleading the case in America, he will remember the voices of very intelligent people in Australia who have been putting the point of view that dangers are inherent in imported capital.

When travelling in an aircraft yesterday, I read a report which stated that the Prime Minister (Sir Robert Menzies) had said that he had had great fun at election time, asking the workers in the Ford factory at Geelong whether they really did not want overseas capital in their industry. In other words, according to him, he was asking: " Do you people not want your jobs? " The Prime Minister is far too intelligent a man really to mean that. He was missing the point, either deliberately or foolishly. I trust that it was deliberate, for the sake of politics. The jobs of men who are working under American capital for the time being would be just as safe if there were an Australian capital content in the organisation. Soap manufacturing organisations in Australia are largely controlled by overseas capital. Are the workers in those organisations worried about their jobs? Would they not be just as well off if there were an Australian capital content in the organisations? Would not the worker, whose son was undergoing tertiary education, be happier if he knew that that boy could finally rise into the top echelons of these companies? There is a great danger that he will not be able to do so if there is complete control by overseas capital. Would not that worker be just as happy, and would not his job be just as safe, if this money, instead of being channelled into the soap industry in Australia, were channelled into industries which not only brought profits to the investors of overseas capital but also brought to this country knowhow which for the time being we cannot provide.

There are two poles to this problem. At one pole the policy would be to allow the unrestricted investment in Australia of overseas capital. We would develop this country as rapidly as possible and probably in the final analysis make ourselves safe from invasion and a greater ally of our great partners, the United States of America and the United Kingdom, and of the other countries in the western world that want to stand with us. That is one pole; I do not know whether it is the right or the left. At the other pole the policy would be to have no overseas finance. If we allow capital to come in without restriction, this will be a new form of colonisation. If unemployment comes .throughout the world, such as we had more than 30 years ago - I pray God it does not come - it will follow as surely as night follows day that those who put money into Australia will demand that their people and their sons take the jobs in the top echelon. This could be, in the final analysis, a new colonisation. I think the good sense of the Australian people will never let either of those things happen. On the contrary, I think they will steer a centre course. But that is not the picture that the Prime Minister was trying to draw. He said: " There will be no jobs for you in the Ford factory. I get a lot of fun out of this ". I admire his sense of humour when he gets fun out of a situation such as this, because if, the 'great might and economic power of the United States began to collapse Australia could very quickly be caught in the vortex of the whirlpool that would result.

For a very long time, not only members of the Australian Labour Party but many other people as well have appealed to the

Government to take a serious view of this situation and to look at the economic circumstances which have flowed from foreign capital coming to Australia. We have had to criticise the Government, as its own supporters have had to criticise it because of its attempts to control the economic situation in Australia. We have appealed to the Government to take some interest in this problem. We have based our appeal on the lowest level. We have asked the Government to conduct an inquiry into the matter, to obtain the relevant statistics, to find out how much money is flowing out of Australia by way of servicing loans, to find out where foreign capital is invested and to find out whether foreign investors are bringing in know how - something we have not got - or whether they are using their funds only to take over Australian industries.

I remember something that was hushed up very quickly on the eve of a recent election. The Press carried a notice to the effect that two Hong Kong millionaires were forming a consortium to take over one of the Broken Hill companies, I do not know whether it was Broken Hill North or Broken Hill South. As I have said, the proposal was hushed up and no one heard anything further about it. Obviously if people form Hong Kong with no knowledge of mining took over, merely by the weight of money, an industry which had been developed as a result of our engineering and mining skills, very little good would flow to the Australian people apart from the shareholders who sold out to the people from Hong Kong and made a good deal of money out of the sale.

We have heard people say that we must have technological information, know how and foreign capital pouring into this country. I mentioned a little while ago that the Government should be looking at the timing in this instance. After all, when it comes to politics the Government is a great master of timing. It ought to be looking at the timing in this instance. There is an argument that may have been valid in the years after the war, from 1946 onwards, but is it so important today? Is it important that there should be such an unrestricted flow of capital into Australia at this time? After all, we have developed rapidly in Australia. Such commodities as plutonium are controlled by an act of the Australian Parliament, and you could not get anything much more important than that. We could be very much more selective today than we were 15, 12, 10 or even 8 years ago. The situation today is vastly different from what it was then.

I have heard members of the Liberal Party say that if we dared to impose a control or a restriction on foreign capital, it would fly away to other countries. I do not believe for one moment that that would happen. I have a profound respect for the people who invest motley. They have a sensitivity about what they are doing that bewilders me. They will come to Australia to invest their money only if this is a nation in which they want to invest. If they do not come here, it will not be because of some minor control, restriction or channelling of money. They will refuse to invest in Australia only when the deal that they can get here is not quite as good as the deal that they can get in other countries.

What has Australia to offer? We have many things that most countries in the world do not have. For decades we have had stable government in both the Federal and State spheres. We have natural resources which many countries do not possess. We have a literate people. We have a standard language. That is important - much more important than one would think before one comes down to the mechanics of doing business. We have people who will honour their contractsThere are not very many nations in the world where that state of affairs exists.

Let us consider the changing situation in Africa, one of the places where British capital, particularly, and a good deal of American capital also have been invested for decades. Investment in Africa cannot be compared with investment in Australia because of the political situation there, because of the racial questions which remain to be solved and because of the problems which the people of Africa are battling with today and which, thank God, we do not have to face in Australia. Instead of becoming wider the area of investment for the great capitalists of the world is diminishing. Do not believe that they will refuse to invest in Australia if we stand up to them and say: "We want to channel your money into certain areas ". They appreciate and respect a country which approaches them in that way. They under stand the position far better than we do. Surely this is a positive form of direction or control, if one wants to use that dirty word. Surely this is a form of action that can be used legitimately by any Australian Government which is concerned about the future of Australia and the Australian people.

The suggestion that controls frighten away investors is not valid. If you examine the countries into which money is being poured today you will find that many of them which occupy a position not nearly as favourable as does Australia are laying down very rigid controls. In spite of this they are still obtaining vast sums of money. In New Zealand the Government has an absolute right of veto. If it wants to veto something, it does so by the authority of the Parliament of New Zealand. India and Pakistan are two countries which many honorable senators opposite have visited. They understand the situation and if it were within their power they would tomorrow feed the starving people there. India and Pakistan are crying out for development but they have imposed the most rigid controls on foreign investment. The Japanese Government looks very closely at any outsider who seeks to invest in Japan, and only on rare occasions will it allow the investor to exercise even a 50 per cent, control of the subject of the investment. The degree of control is a matter for decision solely by the Japanese Government. Most investors have about 30 per cent, or 40 per cent, control.

I am annoyed by the policy adopted by General Motors-Holden's Pty. Ltd. I think I am right in saying that this company will not allow Australian investment because that is against the policy of the parent company, which has its headquarters in New York. I could understand a company adopting that attitude if it were battling in a country in which the political situation was not stable and if it were worried about whether its factories would still be there in 10 years time, if it were worried about whether its employees would sabotage its production and about whether a coup would overthrow the government overnight and wipe out the company. We have seen that happen in so many countries that I need not mention them. But I do not think that the very rigid policy being applied to many countries ought to be applied to Australia.

India is a country which you would think would go down on hands and knees to obtain foreign capital but she has laid down very firmly the degree of Indian capital to be employed in such international organisations as the International Harvester Co. and Parke Davis. It is apparent Chat you will get more respect if you stand up to international investors and say: " You may invest in our country with profit to yourselves but with great advantage to the country that we are governing ".

One looks almost in vain through the statutes of Australia to find legislation relating to overseas investment. It is true to say that virtually there is none. The Broadcasting and Television Act provides for certain things to be done if there is a change in the articles of association or the memorandum of association of any broadcasting or television station. If there is a change in the shareholding it must be approved by the Minister. That applies to individuals in Australia as well as those from outside. Under the television legislation, no more than two television stations can be owned legally by groups from within or without Australia and a non-resident of Australia cannot hold more than 15 per cent, of the shares in a television station.

Quite rightly and properly, we have set up the Australian Atomic Energy Commission which has controlled uranium, plutonium and thorium, the elements which are the basis of atomic energy. Thus a monopoly over those minerals is held by the Commission sponsored by the Government. I do not know how that fits in with the anti-Socialist ideas of the Government. Certainly I do not hear any dissenting voices from the Liberals on the Government side. If one studies the companies acts of the Australian States which are pretty well standardised now, one does not find any discrimination against foreigners. In other words, so far as I know we are the most open country in the world for the investment of foreign capital.

I hope we can take full advantage of the hours we have to spend today discussing a situation that has been thrust upon us and I make this point: Is it not nearly time that the Commonwealth Government and the State Governments got together and formed a body of unanimous opinion in chasing overseas capital? Today we have the ludicrous situation in which Treasurers or representatives of the various States chase capital overseas. What must be the reaction of people in the Middle West of the United States of America, deep in the heart of Texas, in England or in Europe when somebody appears and says, " I represent the north of Queensland " or " I am interested in the south west of Western Australia "? I do not know what I would think if somebody said to me, " I am not here to represent India but Nepal ".

Let us suppose the Premier of a State of Australia approaches somebody overseas and says, " If you come to my State I will give you free land, an allowance for capital equipment before you start and special concessions in other ways. I will see that you have a railway, roads and footpaths." The moment he makes that offer, that must be the standard for every other Australian State. Surely the Commonwealth Government should be taking the lead to ensure that we seek overseas capital on a uniform basis and not in competition with one another.

I realise that people might say that we are merely having a bit of local difficulty with the Americans. I do not think this is so and one man who realises that is the Treasurer. 1 think he is tremendously worried about this and he should be worried because of the things I have mentioned - 'the neglect of these matters by the Government and the incipient problems associated with the investment of overseas money. In anticipation of some of the speakers on the Government side who will follow me and who might claim that the Australian Labour Party does not want overseas investment, I emphasise that there has never been a real challenge by us to the importation of men, materials or capital. We have merely warned of the possible end of this situation. We have seen what happened in the case of oil. There is almost 100 per cent, control of our oil from overseas. We have seen what has happened in the case of bauxite. We have probably the main deposits of bauxite in the world while the consumption of aluminium is growing day by day, particularly in the emerging countries. Geographically we art in a position to exploit this demand.

It is a good thing that the Treasurer should be in the United- States of America at this time. If I had anything to do with the Government I would have had him -there and he would have gone with a much stronger hand than he has. I hope he relies not on the attitude that has been adopted by this Government over a long period but on the warning voices that have been raised in an attempt to challenge the Government to do something and face up to the situation which could develop finally, particularly if there is an economic collapse overseas. This is something we have been able to dodge since the Second World War but the danger hangs over our heads like the sword of Damocles. I hope that the Treasurer remembers these warnings when he discusses the situation with those in the top echelons in the United States. I hope that in doing so he will realise that he is talking to people who want overseas profits and who also have a national interest when they invest in Australia. 1 hope - and I do not say this disrespectfully - that the Treasurer will not adopt the half-hearted attitude of the Prime Minister in emphasising, in relation to the embargoes against Australia, that export is our life blood. We were brought face to face with this fact when the United Kingdom looked like entering the European Common Market - and that issue is not dead. We have to impress on the American people that their great ally Australia is dependent on exports. We want to impress on them that we can do something about this problem of capital investment and can limit the amount of capital investment from the United States of America on our own terms to help the Americans. We have to show them that any limitation on their capital investment should be of benefit to them and we can do that by saying that we will take capital on certain terms.

We should ask America to examine very critically the embargoes it has placed upon investment in Australia. We should point out that we appreciate the problems that face America. We should ask the United States to regard Australia as a nation in a special position because of its situation in the Pacific and realise that anything America does to help us will also help other nations in this area and throughout th« world.

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