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Wednesday, 20 August 1980
Page: 497

Mr John Brown (PARRAMATTA, NEW SOUTH WALES) - by leave - As a member of the House of Representatives Standing Committee on Expenditure and on behalf of the Opposition I take some solace from the fact that the Government, in accord with the promises that have been made several times in this Parliament, has responded within a six months period; though only just. But, it has done so, and we take some solace from that. The Expenditure Committee viewed the report that it made in a very serious vein. It was looking at a statutory authority which has had the use of about $100m of public money and which has not until this stage been the subject of any parliamentary scrutiny. Under those terms the members of the Committee considered the report to be very important.

I am a little disappointed that the Government has fobbed the matter off by saying that we made at least some suggestion in the report that the authority should be the subject of some inspection by the Committee of Inquiry into the Australian Financial System chaired by Mr J. K. Campbell. I cannot blame the Treasurer (Mr Howard) too much I suppose for hiding behind that aspect. I think it is important to realise that many of the recommendations made within that report need not necessarily become the subject of inquiry by the Campbell Committee in order to be implemented. In fact, the Treasurer pointed out in his statement that we said that there were overall deficiencies in the capital market and that we had decided that the Campbell Committee should consider exactly what importance the Australian Industry Development Corporation has in that market. That was the reason for our proposed reference. Many other more important things could be done by the Government without necessarily having that reference. I will point out a few.

The AIDC, of course, was created by Jack McEwen when he was a member of the House. I guess that there are some philosophical considerations by the Government that do not make it amenable to what the AIDC stands for, but this side of the House is very impressed with the prospective potential for the AIDC to involve itself in some real public ownership of Australian industry. We are stressful of that fact. When the Bill that the Treasurer has foreshadowed comes up for debate we will make very strong statements as to what we would do in government to bolster the AIDC and to make it fulfil what we believe to be its proper destiny.

In the course of our committee inquiry we found that the AIDC had developed, within the ranks of its staff, a great deal of expertise in all areas of industry. It had also developed market expertise in relation to the garnering of finance. The Committee thought that the AIDC, with proper support from the Government, was a great vehicle for organising consortiums of finance to involve themselves in what the Government keeps loudly trumpeting as the great future development of Australia's resources. The Committee also made the very important point in the report that the AIDC should have the capacity to get itself involved in the service industries, which it now does not have. I do not know that that should necessarily be the subject of scrutiny by the Campbell Committee in order for it to be implemented.

We also made some very strong recommendations about sections 6 and 8 of the Act under which the AIDC operates and which in fact at this stage cause a great deal of confusion and conflict with regard to how the AIDC sees itself. Some parts of those sections of the Act make it the primary condition that all lending operations need not necessarily satisfy commercial criteria. There is some confusion as to whether public interest in the form of providing employment and export opportunities et cetera, should not be overriden by pure commercial considerations to make the organisation produce a profit.

The AIDC had a fairly chequered career in its early period. I think it is accepted by the Government, as it was by the Committee, that its early performances were not good; that it's more recent performances have been very good no matter by which criteria they are judged. The Committee felt that the Government should be encouraging the AIDC to get on with the job of doing the task it was given when it was first formed. I am not - I am sure the other members of the Committee are not - very satisfied that the Government has seen fit to fob the matter off to the Campbell Committee of Inquiry. However, we take some solace from the fact that at least the Treasurer has foreshadowed the Bill which will be introduced to free the gearing of the maximum ratio of borrowings to paid capital and reserves from 5:1 to 8:1. It is some solace to us that one of the more important recommendations has been taken up.

As I said before, when the Bill comes before the House the Opposition will put very strongly its case about what it will do when in government, with the AIDC to make sure that the AIDC fulfils its proper destiny in the Australian capital market. Before concluding, I want to bolster the Treasurer's remarks regarding the work that the Committee put into this report. I am sure all members of the Committee were strongly supportive of our Chairman, the honourable member for for Lilley (Mr Kevin Cairns). The Expenditure Committee is one of the better committees of this House.

Mr Young - It sounds like a club.

Mr John Brown (PARRAMATTA, NEW SOUTH WALES) - It is a very happy club; it has a great deal of support from both sides. I am a little disappointed that the Treasurer does not share our view.

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