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Thursday, 22 September 1983
Page: 1168

Dr THEOPHANOUS —My question is directed to the Minister representing the Minister for Industry and Commerce. I preface my question by noting that prior to the election the Government indicated that it would act to improve the capacity of the Australian Industry Development Corporation to support Australian industry. In view of the importance of industry policy in the current economic circumstances, what action has the Government taken to meet this commitment?

Mr JOHN BROWN —In answering the honourable member I should pay tribute to the many hours of work that were put into the formulation of a new policy for the AIDC by the Industry Committee of the Government, which is under the distinguished chairmanship of the honourable member for Burke. In election policy statements the Government made a firm commitment to expand the role and the capital base of the AIDC to enable it to provide finance for industry reconstruction and, probably more importantly, the financing of new growth industries. This commitment was made in recognition of the fact that there is a great gap in the financial market in Australia in terms of the provision of equity and risk capital. There is a need to adopt a more positive approach to strengthening and improving the competitiveness of industry.

In the Budget announced recently we made some very major and significant changes to the charter and the role of the AIDC. Firstly, we allocated an additional $12.5m in capital in 1983-84, which took its capital base to $75m. Secondly, we took steps to ease the gearing ratio, which increased the borrowing potential of the AIDC from 8 to 15 times the level of its capital and reserves. Thirdly, we relaxed the restrictions on the investment of capital to allow its use in the provision of equity. Fourthly, we guaranteed its borrowings by the Commonwealth. All of those things were important because, for the previous seven years of sterile government and sterile capital policy by the previous Government, the capacity of industries-particularly new industries, the high technology industries-to achieve equity or loan capital was almost nil, because those industries could not comply with the demands of conservative, established finance institutions. But this Government, with its very imaginative approach to industry, has now set the scene for industries to be able to expand and develop because we have taken the plunge in providing more capital for the possibility of Australia restructuring and modernising its industrial base.

Since that time, of course, further decisions have been made regarding the role and functions of the Australian Industry Development Corporation. Firstly, we have enabled the AIDC to invest in any industry, but particularly we will require it to look at traditional manufacturing industry. But we have given it an extended charter to look at the services industry, particularly the tourist industry, where Australia's future belongs. If ever we are to find new jobs in Australia, the big area of opportunity is in the tourist industry, which was absolutely denied and ignored by the Opposition for the seven years that it was in government. It had a goldmine at its feet but it did not have the brains to dig up the first sod. We will see that the tourist industry, the services industry, the new technology industries will be properly capitalised by our moves to broaden the base of the AIDC. Secondly, we have increased--

Mr Hodgman —It was a good decision of Roger Shipton to appoint Paul Hogan.

Mr JOHN BROWN —Do not talk about him. It is said that mimicry is the highest form of flattery. Talk about a shadow-wherever I go, he is shadowing me, writing down the things I say and then releasing them as Press releases. Occasionally he gets things half right. I will buy him a new set of gum shoes so he will follow me more quietly. Secondly, we have increased the statutory capital of the AIDC. This is a very important matter. If the Opposition had enough brains it would listen because we are fulfilling a function that it constantly refused to observe when it was in government.

Mr SPEAKER —Order! I invite the Minister to shorten his answer.

Mr JOHN BROWN —We have increased the statutory capital of the AIDC from $100m to $150m, to be taken up in annual increments of $12.5m. We have required the AIDC to pay an annual dividend, which it is quite capable of doing. It is a very efficient organisation. The sum of all of the moves we have made in the Australian Industry Development Corporation will be to the benefit of Australia' s industrial future. I feel very proud, in representing the Minister for Industry and Commerce and the committee of the honourable member for Burke, that the Government has seen fit to initiate the moves that these people have made. It is greatly to our credit.