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Wednesday, 20 May 1970

Mr Kevin Cairns (LILLEY, QUEENSLAND) - Firstly, let me reply to the Minister for Shipping and Transport (Mr Sinclair) and to the very friendly comments made by the honourable member for Grayndler (Mr Daly). When I first came to this place I was told by some acquaintances of the honourable member for Grayndler to beware of him on the occasions on which he pats people on the back and tells them that they are good fellows. I feel that I have been subject to that kind of pat on the back this evening. I was also intrigued by his concern with the word 'reasonable'. He said that it needed some definition. I suggest that 'reasonable' is a kind of word that is defined in the negative rather than in the positive and that the definition of it is to be found very readily and very easily in the honourable member for Graydler

Now let me comment on one or two words from the Minister. I believe that these comments are appropriate. He mentioned that clause 8 (3.) (a) contained sufficient support for the proposition that the Corporation would be passive in its operation. He then said that clause 8 (3.) (c) made it perfectly clear that the Corporation did not desire to retain a controlling interest in any company to which it had given substantial assistance. I suggest that clause 8 (3.) (a) represents a nice aspiration but that there are no guidelines according to which that aspiration is to be judged or according to which it is to be applied. Clause 8 (3.) (c) indicates that the Corporation shall endeavour to avoid becoming or remaining in a position of having a controlling interest. We merely desire to make it clear, with a great deal of flexibility, where a controlling interest would end. I thought that in the amendment a maximum of flexibility was allowed. After all, the amendment would do 2 things. It would propose a fairly high proportion which was appropriate, namely, 15% - a proportion that is higher than that which is to be proposed by the Treasurer (Mr Bury) in a later Bill to prevent Australian banks from being taken over by a shareholder with a large interest.

Secondly, we looked at the occasions on which the Corporation would be required to obtain and retain a much higher proportion of equity than 15%. This can involve matters of seasonal finance, matters' of rollover finance for an organisation and cases in which short term support is needed. There are examples of this type of support in every Australian banking and financial institution. We utilised all of these examples to say that 15% was to be aimed at but that, if for those reasons- the provision of bridging finance of various types - that figure was to be exceeded, the Corporation should not thereby be debarred from engaging in its actviities and the. functions that are part of those activities.

I believe very sincerely that the Minister has never answered that proposition. I suggest that he has rather ignored it. To answer it by saying: 'We do not want to do this. We do not want to make the Corporation a lender of last resort We do not want to require a return on its capital, which is the alternative, because we want to keep it at arm's length' is to use a nice choice of words, but I suggest that it is a choice of words without much meaning. It is a choice of words without meaning, such as the earlier choice of words when he said that the Corporation, in its capital, shall have 3 characteristics - the investment shall be noncontrolled, it shall be transitory and it shall be tapering. But these are 3 adjectives without a great deal of significance. They just remain said, and they do not appear in the Bill. They are not enshrined in any clause or any sub-clause and they can be ignored for reasons which themselves may be fairly transitory. If one says then that the Corporation is to be retained at arms length by not requiring it to be a lender of last resort or to secure a return on its capital and it is to be kept separate from government, I hope one reflects how the Corporation is to be appointed and its directors appointed. However, I do not want to enter into that part of the argument. Rather than the Corporation being at arms length, if these kinds of provisions are not written into the Act it can be rather succoured and coddled in its operations. That is the effect I fear on the Australian community.

The honourable members for Hindmarsh (Mr Clyde Cameron), Grayndler and Lalor (Dr J. F. Cairns) had some words to say. They suggested that they had become the battlers for competition and that we are the people who do not like competition. I found this a delightfully entrancing kind of proposition. They now want competition. If we look at their own structure and the way in which their decisions are made, they know that they have done everything over the years to preclude competition, especially with respect to their own positions. They would not know what competition is. All we say is that this Bill is to operate in a competitive system with neither advantage nor disadvantage. I would suggest at the moment that it will operate with a great deal of advantage compared to those institutions with which it is in competition, and it will be to their detriment. However, I return to the question of the 15%, which can be substantially upwards. The provisions in the amendment are much more generous than those that apply to other institutions which are concerned with broadcasting and television and to other organisations which will be concerned with amendments introduced in relation to the Queensland Bank.

Mr Irwin - What will they be?

Mr Kevin Cairns (LILLEY, QUEENSLAND) - For the Government in both of those interests, 15%, and it is going to be 10% and no more in relation to the latter. This has been made clear by the Treasurer. If those provisions are applied in respect of those institutions I would expect that 15%, with a substantial amount above it, to be held in equity as part of bridging finance. This ought to be acceptable to the Government. I am a little surprised and a little disappointed that the Government does not accept the proposition, but I assure the Minister for Shipping and Transport (Mr Sinclair) and the Deputy Prime Minister (Mr McEwen) that although I am surprised I thank them for having accepted other amendments. Amendments negatived.

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