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Tuesday, 9 May 1972
Page: 1430

Senator GREENWOOD (Victoria) (AttorneyGeneral) - This whole matter of the extent to which Australian resources are owned or controlled or are likely to be owned or controlled or owned by overseas interests is one which has excited the attention of this Senate, particularly over the last 7 or 8 months. I think that the interest which the Senate has indicated is reflected throughout the community. It is no less an interest and a concern which is shared by the Government of this country. But I think there is one difference between the approach which the Government has taken and the approach which today is being sponsored by the Australian Democratic Labor Party and today supported by the Australian Labor Party. The Government's approach is that this is a matter on which policy can be determined only after there has been a full and exhaustive examination of the complexities and problems of this situation. The Government has the responsibility of initiating and carrying through policies which it determines. With all respect to honourable senators of the Democratic Labor Party and of the Australian Labor Party, I say that they do not have that responsibility. I do not believe that it is in the national interest to come forward with broad propositions which seem to take up a political catch cry, which have an emotive content and which are thereby likely to curry some electoral support if they are prejudicial to the future of this country.

There is no question but that this is a complex matter. I ask: What is it that has occurred in the last 5 or 6 months that has caused the Democratic Labor Party virtually to about face on this issue? What is it that has caused the Australian Labor Party suddenly to emerge overnight as a party which would stop the sale of all shares which an overseas interest may be purchasing? Is there any reason other than that it seems to be electorally advantageous to curry favour by adopting a policy which, intrinsically, has no merit and which cannot be shown to have merit instead of giving to this subject the examination which it requires? I refer to a debate which took place in this chamber on 10th November 1971 on a formal motion for adjournment initiated by the Democratic Labor Party. On that occasion Senator Byrne was the spokesman for the Democratic Labor Party. He put up a considered case, which carried the support of the Senate, for an examination of the complexities of this question of foreign investment in Australia. The honourable senator said:

I do not wish this matter to be debated in any atmosphere of hysteria - in other words bv its being said that this country is being taken over - or with any exaggeration. That can only have the effect of deterring the legitimate flow of capital which, properly controlled and disciplined, is absolutely and vitally necessary for the development of Australian resources. But we do feel that this is a matter which must attract early examination in depth and in breadth. It is a matter at which the Australian people are looking and with which they are vitally concerned. We need quite a calm appreciation of the whole situation. I trust that the senate, giving its mind to this position, will find it appropriate to support the creation of an appropriate select committee of the Senate to examine the whole matter so that we will know just where we are going.

Accordingly the Senate, by subsequent resolution, appointed a Select Committee which is examining the ramifications of this situation in Australia. There was no suggestion in the approach of the Democratic Labor Party last November, or December when the committee was established, that there had to be a halting of all share transactions in which overseas purchasers were concerned. At that time there was no suggestion from the Australian Labor Party that there was any need to halt all share transactions. All that the Australian Labor Party was concerned to do was to repeat ad nauseaum what its spokesmen had been saying for a number of years and that is: 'How dreadful it is that there is so much foreign interest in this country.' But it never suggested precisely what it would do to meet this situation. As far as the Government is concerned it believes - and its Prime Ministers, Mr Gorton, the present Prime Minister, Mr McMahon, and the Treasurer, Mr Snedden, have all indicated the concern which the Government has and that is that this matter should not reach a situation where Australian resources are overwhelmingly in the hands of overseas interests. The essential point I make is that the Government is not prepared to step in on the basis of ad hoc measures which do not take account of the very many complexities which are involved. I refer to what was said by the Prime Minister on 5th March this year in an interview in Melbourne. He stated:

We've got to make certain that we act in Australia's interests, and we don't let others get too big a hold on Australian assets.

He went on to say:

We must have a full analysis of the pros and cons. Once we have that we can, if need be, turn our attention to particular aspects in more detail.

Of course, the Treasurer has the obligation, which he has accepted, of presenting a White Paper which explores the various ramifications of this matter. That White Paper is due to be presented before this parliamentary session ends. As the Treasurer has said, it will provide the opportunity to have an informed discussion because there are many aspects which have to be taken into account. What is it that overseas investment has provided for this country? In the first place it has provided development in areas where, with our own resources, we would not have had that development. Does anyone believe that the areas to the northwest of Australia and the mineral resources there would have been developed in the way they have been, and at the speed they have been, if it had not been for the investment of overseas capital? Does anyone believe that we would have had today what is a most significant import replacement, namely, our resources of off-shore petroleum and natural gas in the Bass Strait area, if it had not been for overseas capital? Does anyone believe that in areas where risk has to be undertaken that we could have found the Australian capital needed to undertake that risk? Obviously we would not have found it.

We have had an exploitation of resources which would not have occurred without the fact that some people who were interested in the political stability of this country, the opportunities for profits and growth, and the opportunities generally for investment, were prepared to come here to take advantage of those opportunities. In addition, we have had through overseas investment in this country the introduction of valuable expertise and know-how. Above all, we have maintained and sustained over this period a continuing employment situation which is part of the growth of this country. The role of overseas capital cannot be underestimated because it has gone hand in hand with the growth and rising standard of living we have all experienced over recent years. It is not to bc suggested that there are not disadvantages. When we have the situation, which 1 think is current in some places, in which overseas interests are coming into Australia simply to take over established enterprises, it is hard to see where the justification lies in terms of bringing in expertise and knowhow and giving the advantages of development which I have given as justification for welcoming overseas capital to this country. But the extent to which government is entitled or should come in to prevent a particular takeover or a particular investment is very difficult of determination. That is something which has been discovered in Canada.

We have heard that over many years there has been a strong feeling in Canada that many Canadian resources are in the hands particularly of United States controllers. 1 do not doubt that that feeling does exist, though there has been debate in

Canada as to whether or not foreign investment is wholly disadvantageous. I understand that there have been several reports on this matter in Canada but that it has taken a long time for any action to be taken with respect to them. A report was prepared by a royal commission in 1957, another inquiry was conducted by a number of economists in 1967-68. and more recently another report was commissioned and presented in, I think. May 1971. In spite of this, it is only in May 1972 that the Canadian Government has come out and indicated what it proposes to do. The Prime Minister of Canada made a statement, I think within the last week or so, in which he indicated the general lines of policy that Canada was proposing to pursue. What Canada is proposing to pursue is not what the Labor Party is now urging, that is a complete shut-down of all share transfers. What the Canadians are suggesting is that there should be an opportunity for each takeover to be reviewed, and to be reviewed in the light of whether or not it will be of benefit for the Canadian situation. Who knows ' whether that will be the position in Australia? It is obviously a matter which has to be examined in depth.

It is interesting to see some of the matters to which the Canadians have referred. We are told that the Canadian Government will consider any proposed acquisition by overseas interests in the light of 5 factors. They are the effect of the acquisition on the level and the nature of economic activity and employment in Canada, the degree and significance of participation by Canadians, the effect of the acquisition on productivity, industrial efficiency, technological development, product innovation and product variety in Canada, the effect of the acquisition on competition within any industry or industries in Canada, and the compatibility of the acquisition with industrial and economic policies. Obviously they are matters which any considered examination of this problem must take into account.

What does this urgency motion contemplate? It contemplates immediate action which, as I have said before, will have the effect of freezing all share transfers. What does that mean? It means that there can be no transfer of shares to a purchaser who happens to have an overseas interest. What form of legislation will adequately police that? There are, of course, people who have beneficial ownership in shares. What sort of legislation can be immediately introduced which will provide effective measures which cannot be avoided? Are we simply to prevent all share transfers, as this proposal suggests, irrespective of the size of the company and the interests in which it is involved, and irrespective of whether there is any prior overseas interest in the company? What is the basis upon which there is to be this freezing of all share transfers? Is it simply to be a matter of whether a person was an owner on a particular date? It is a policy which is not in this country's interests. We must recognise that we ought to have guidelines, and guidelines predicated after thorough examination, as to what types of overseas investment in what areas are welcome in this country. I do not believe that overseas investors will in any way be apprehensive if those guidelines are laid down. Above all, we must not step in on this ad hoc method which the Australian Labor Party has long enunciated and which unfortunately the Democratic Labor Party now seems to support, for it does not have regard to the fact that irreparable harm may be done to our development if we frighten away overseas investment in this country. It was only a matter of a fortnight ago that the Leader of the Opposition (Mr Whitlam) said that the Victorian Government's action in passing legislation designed to prevent the takeover of Ansett Transport Industries by Thomas Nationwide Transport was something which would worry the foreign investor. All I say is this: How does the Labor Party square that approach by its Leader with the sort of approach it is recommending today, which is consistent only with the type of action that was then condemned by him? I suggest that what we want is the statement which the Government will bring down in the form of a White. Paper in the next 2 weeks. Then, in the light of informed discussion and information, this debate can be conducted in a way which will ensure not only that the objectives are achieved but also that the national interests are not imperilled.

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