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Thursday, 21 August 1980
Page: 599

Mr HOLDING (Melbourne Ports) - I want to pursue some of the remarks made by the Deputy Leader of the Opposition (Mr Lionel Bowen) when he pointed out the human plight and tragedy of workers dismissed at the Pagewood motor vehicle plant. The point I want to make and which I think has been ignored is that the Deputy Leader of the Opposition was pointing out in simple human terms that the decision to close the Pagewood plant was not a decision which was necessarily supported by this Parliament or by this Government and certainly was not a decision supported by the Government or the Parliament of New South Wales. It was a decision made by General Motors-Holden's Ltd. It was a decision made in a board room in Detroit. It was a decision which can substantially affect the lives of thousands of decent Australian citizens. It is that aspect which I think ought to be of real concern to this Parliament.

The reality is that the future of our motor car industry in Australia will not be determined by this Parliament or by this Liberal Government or by a Labor Government, and it will not be determined by a State Government. It will be determined in board rooms overseas by large multinational corporations which in fact control the effective future of the motor car industry in Australia. That is not only true of the motor car industry but also of very significant sectors of the Australian economy. It is that aspect of the matter that I want to develop.

In this Parliament, the Treasurer (Mr Howard) and the Government continually postulate a doctrine of economic recovery by asserting support for the freedom of the market place on the one hand, with cutbacks in the public sector on the other. When talking of freedom of the market place, Government propositions vary between traditional Keynesian and Friedmanite concepts, neither of which in fact apply in Australia today. If one looks at the Australian economy and at those who make effective economic decisions within the framework of that economy it is obvious that Australia has now become quite clearly a client state of large transnational corporations. The development of those corporations over the last 25 years has profoundly affected the whole basis of most Western capitalist-based economies. Many of these large global corporations have more economic power than the nation states within which they operate. Some 400 transnational corporations control half the agricultural products of Western trade. About half of America's imports and exports, 30 per cent of British exports and one-third of Australia's imports and exports are effectively controlled in this way. Canada is the country most penetrated by these large corporations. Australia is now second on the list. About 40 per cent of basic economic resources in Australia are now foreign controlled. In some sections of the economy the figure is as high as 100 per cent. Every Australian is affected by the price of petrol. My own State at the moment has the largest discoverable reserves. They are in Bass Strait. Does anybody seriously believe that the rate at which those oil fields will be developed, and the way in which those oil supplies will be made to meet the needs of Australian motorists, will be decided by this Government or, indeed, by the Hamer Government? Of course not. The reality is that the decisions on the use of oil resources will be determined in New Jersey by the Esso company.

Mr Fisher - What about BHP?

Mr HOLDING - Broken Hill Pty Co. Ltd has a very minute say in that.

Mr Yates - Rubbish!

Mr HOLDING - I will be happy to discuss that aspect with the honourable gentleman. The history of Esso-BHP shows that when natural gas was discovered in Victoria the company tried to sell it to the Victorian Government at a price exactly double the price it ultimately received and the Government of Victoria paid.The first duty of any global corporation, and indeed of BHP, is to maximise profits. In terms of the way in which global corporations work, the Pagewood situation is only the beginning. General Motors-Holden's Ltd is concerned with the question of its own profitability, not merely in Australia, but in a global sense. That is the point I wish to make.

It is extraordinary that this Government at present is so locked into its own economic rhetoric that the Bureau of Statistics was directed to terminate in 1976-77 the collection and publication of statistical material relating to the extent of transnational intervention in our economy. This occurred despite the fact that the Organisation for Economic Co-operation and Development found it necessary to establish guide lines, for transitional corporations. The United Nations Conference on Trade and Development has been continually, for some years, monitoring transnational operations in Third World countries. In 1973 in the United States- the home of private enterprise - the Senate found it imperative to conduct a very wide ranging inquiry into the effect of its own transnational corporations on its own labour force and its own economy. Evidence was given to the Congress by George Meany on behalf of the American trade unions which pointed out that American multinational corporations had exported over 900,000 jobs which previously had been performed in America by American workers to the low wage countries of Asia such as South Korea, Taiwan and Indonesia. I suppose something is to be said about the naivety of all of us when American multinational companies can deskill their own work force and ship manufacturing skills out of the United States. This has occurred in the United States with the television manufacturing industry and other sectors of the manufacturing industry.

The very nature of a global corporation operation is to look at situations globally. If a worker can be employed for 14c an hour in Taiwan or South Korea why pay wage rates such as those received in the United States and Australia? That is the pattern. If that is the evidence given to an American congressional committee, why should we expect these corporations to act any differently when dealing with Australian workers within the Australian economy.

The reason that the American Senate, the United Nations and the OECD are monitoring these activities, conducting inquiries and endeavouring to establish codes of conduct is that they understand that when any nation state allows a large segment of its economy to be dominated by transnational corporations the consequences for that state are that its government loses many economic options available to it to make economic determinations and judgments relevant to the way its own community ought to be developed and in the way in which it perceives its own economic interests.

Mr Yates - Just like Poland.

Mr HOLDING - I am worried about Australia. I suggest that the honourable member for Holt would be well advised to worry about what is occurring in Australian society rather than what is occurring in Poland. His first duty is to the electors who put him here. The foreign penetration of Australia has become a matter of increasing concern. I seek leave to incorporate in Hansard a document containing details of that foreign penetration. I have already shown it to the

Minister for Education (Mr Fife) who has approved of its incorporation.

Leave granted.

The document read as follows -


Over the period 1971-72 to 1974-75 foreign ownership of the mining industry increased from 49 per cent to 52 per cent and foreign control from 54 per cent to 60 per cent.

Over the period 1966-67 to 1972-73 foreign ownership of manufacturing industry increased from 25 per cent to 31 per cent and foreign control from 29 per cent to 34 per cent. Of the 200 largest enterprises 87, amounting to 45 per cent of production, were classified as foreign-controlled. Particular industries may have a much higher figure for both ownership and control. The figure for foreign control in the pharmaceutical industry is 78 per cent, in cosmetics 91 per cent, in nonferrous metals 79 per cent, and in automobiles 99.8 per cent.

On 1973 figures foreign ownership of finance companies was 48 per cent and foreign control 42 per cent.

On 1973 figures foreign ownership of life insurance companies was 37 per cent and foreign control 1 9 per cent.

The next table gives some idea of the size of specific subsidiaries of transnational corporations operating in Australia and the close proprietorial hold kept over them by their foreign parents.


The third set of figures suggests the concentration of economic power in Australia:1

Manufacturing Industry: 200 corporations produce 31 per cent of goods and 30,000 small and medium sized companies produce the remainder.

Mining Industry: 79 concerns account for 72 per cent of turnover and over 1 ,300 for the remaining 28 per cent.

Retail Sales: 6 firms are responsible for 22 per cent of sales out of approximately 1 27, 000 establishments.

Life Insurance: 4 corporations possess 81 per cent of the industry's total assets.

Finance: 1 3 finance companies account for 80 per cent of all advances.

Banking: 7 banks are responsible for 87 per cent of all loans.

Media: 3 groups effectively control 94 per cent of all metropolitan daily newspapers and 4 groups 47 per cent of all metropolitan television stations.

The Operation of the Regulatory System

The table below indicates the consideration of foreign takeovers from the period 1 976 to 1 979. (Source: Foreign Investment Review Board Reports, 1977 to 1979, as quoted in 'Labor and the Transnational Economy: Strategies for Control', by Michael Sexton, Law School, University of New South Wales):

These figures do not take account of proposals that were notified but found not to fall under the FTA, or proposals notified but later withdrawn.

Out of the 1976-79 total the following figures are significant: almost 40 per cent involved the transfer of equity and/or control from one foreign interest to another 30 per cent involved some loss of Australian control.




Over the period 1976 to 1979 there was also consideration of projects entailing the establishment of a new business by foreign investors in Australia and the following table details that consideration:

These figures do not take account of proposals notified but later withdrawn.

The majority of this proposed investment was in either the minerals or the manufacturing sector. Thus in 1978-79 almost 90 per cent of the new investment was expected to be in these two sectors. Japanese and United States investors predominated with 27 per cent each in 1978-79. Ninety per cent of all Japanese investment was directed into new businesses as opposed to 42 per cent of United States investment and only 1 5 per cent of United Kingdom investment.

Mr HOLDING - I make the point that unless the Government and the Parliament examines this question with the same approach as has been shown by the United States Congress, by the OECD countries and by the United Nations this Government and any future government will lose its capacity to make major economic decisions which will affect the welfare of the Australian people. I do not believe that many people in Australia want to be placed in a position where their economic future will be determined overseas by multinational corporations whose only concern with Australia is to maximise profits.

Mr DEPUTY SPEAKER (Mr Millar)Order!The honourable member's time has expired.

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