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Thursday, 10 October 1985
Page: 997

Senator VIGOR(3.27) —As in the case of the Primary Industry Bank of Australia, which was established to finance and promote the rural sector of our economy, the Australian Industry Development Corporation's primary objectives are to promote Australian industry and Australian ownership in industry. Its operations are similar to a bank in that it borrows money, lends money and provides corporate advice. However, unlike a bank, the Corporation's Industry Development Division specialises in investment in industry by providing risk capital, especially for start-up situations and for projects involving major expansion or reconstruction. It also attempts to stimulate development in the more positive role of a catalyst and an active investor. I am aware that the Campbell Committee of Inquiry into the Australian Financial System concluded:

The retention of the AIDC as a government-owned financial intermediary is not necessary for an efficient and competitive financial system.

It stated further:

The AIDC should be disposed of to private sector interests.

With a government hell bent on deregulation and an opposition which seems to believe that privatisation is the solution to most of Australia's economic problems, I wish to put on record that the Australian Democrats support the role currently played by the AIDC. We believe in the importance of keeping government control over this Corporation. I do not believe that the private banks existing in Australia, or the 16 foreign banks which are now entering Australia, can provide the financial assistance that is needed for Australia to develop a strong trading, industrial and technological infrastructure. They are motivated by profit, not by long-term benefit for the Australian economy. Profit is not a dirty word but the blind pursuit of profit is not synonymous with what is good for the Australian economy in the long run.

In a mixed economy it is appropriate for the Government to play a role in setting the pace and direction of economic development. In Australia it is especially important that we aim to reduce the level of foreign ownership of our resources. It is crucial to have an organisation like the AIDC which can foster Australian enterprise and ideas so that these are not sold to foreign companies. It is therefore pleasing to see in this report that Australianism is a significant part of the AIDC's activities. The Corporation has increased Australian equity in existing projects-for example, the Palm Valley natural gas joint venture, referred to on page 34 of the report, and the Hospital Corporation of Australia Pty Ltd, mentioned yesterday by Senator Coates. It is also involved with Mica Pty Ltd and Austek Microsystems Ltd, which are high-tech industries. It has also supported joint ventures to capitalise on breakthroughs in the development of a vaccine against malaria, referred to on page 36. All of these are admirable objectives.

The Corporation makes a profit. It does not require massive government funding and it provides assistance and advice to new enterprises and industries. It has now adopted a new policy of allocating some of its resources to facilitating reconstruction of Australian industry and has set up a special industry restructuring unit to assist in this policy. I do not believe that it is a suitable candidate for privatisation. The AIDC provides assistance that would not come from the private banking sector. It can be directed to help achieve social and economic priorities considered to be important by the government of the day. I believe that it would be utterly short-sighted and disastrous in the long term just to go for a drive for profit or to try to sell the AIDC to the private sector as a banking operation.

Question resolved in the affirmative.