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Wednesday, 27 March 1985
Page: 881

Senator LEWIS —I ask the Minister for Finance whether it is a fact that the Superannuation Fund Investment Trust withdrew from a proposed 15 per cent investment stake in the Alcoa of Australia Ltd Portland smelter. Was this due to the obsessive secrecy provisions of the Cain Government's Alcoa (Portland Aluminium Smelter) Amendment Bill, which prevents adequate disclosure of the viability of the project, or was it because the project's viability is now open to serious question due to the attitude displayed by the Cain Government? Finally, has the Victorian Government sought Australian Loan Council approval to borrow the additional $260m overseas, or will the Federal Government give consideration to bailing out Mr Cain just as it came to the rescue of the Burke Government over the North West Shelf project?

Senator WALSH —I am glad that Senator Lewis drew the analogy between the Cain and Burke governments in this respect because I was about to do that myself. They were both victims of stupid decisions made by the previous Liberal governments in Victoria and Western Australia respectively. The Western Australian Government was confronted with a prospective deficit in actual dollar terms of several billion dollars-billion dollars, not million dollars-because of the natural gas contract which Charlie Court forced the State Electricity Commission of Western Australia to sign back in 1980 and which left the SEC with no market for about 40 per cent of the gas it contracted to buy. What is more, if I may say so, Charlie Court insisted on adding, completely gratuitously, another 12.5 per cent on to that contract when he was not required by the joint venturers to do so. In the case of the Victorian Government, a lot of capital was sunk into the Portland smelter before the Cain Government came to office. The Cain Government inherited that difficult situation; it was not responsible for it. As far as I know it has coped with that very difficult inheritance as well as any government could reasonably be expected to do.

Senator Lewis asked whether the Superannuation Fund Investment Trust had withdrawn from the project. I do not think 'withdrawn' is really the correct word. The SFIT was contemplating taking some equity in the project and three months ago, I believe, it decided that it would not take equity in it. The fund is now regarded by the Government as autonomous. There is some legislation to go through the Parliament, but I certainly regard it as autonomous, as my predecessor did. Therefore, I do not believe it is my duty to inquire into the investment policy of the members of the trust or to demand to know from them the reasons why they did or did not make any particular investment. The Government's attitude is that, providing the trust complies with the provisions of its enabling legislation-in other words, stays within the law-what it does is its own affair, because it is responsible only for contributors' money, not for government money per se. To my knowledge an application from the Victorian Government for Loan Council approval for extra borrowings has not been made, but I will see whether the Treasurer has anything to add.