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Thursday, 28 November 1985
Page: 2471

Senator ARCHER —Has the attention of the Leader of the Government been drawn to the fact that more and more of Australia's top companies and investors are finding it more attractive to invest overseas than in Australia? I refer, amongst others, to Broken Hill Proprietary Co. Ltd, Elders, News Ltd, and Mr Holmes a Court, and to the vast amounts of money involved. Has the Government considered the implications of the moves, and does the Minister believe that it warrants any particular action by the Government?

Senator BUTTON —I am as aware as Senator Archer is of a number of substantial investments by Australian companies overseas. I do not necessarily draw the same conclusions as those which Senator Archer tends to imply in his question about the desirability or otherwise of that process. The fact of the matter is that a company such as BHP is an international company. It embarked on a deliberate strategy to become an international company, and the first step in that was the purchase of the Utah interests in Australia. There have been a number of steps since, including BHP investment in oil drilling in the South China Sea, in various companies in the Americas, both north and south, and so on. I do not see that as in any way being a strategy which I think the question seeks to imply-of saying that the investment environment for these companies is unsatisfactory here and that they are therefore embarking on a course of international investment. I think that probably exactly the opposite follow; that the fact of the matter is that companies of that size have sufficient international market strength, acquired on the basis of their operations in this country, to enable them to compete in an international market in that way. As a Minister in this Government, I certainly do not see that as an undesirable thing at all.

This question is often raised in the context of manufacturing industry. I think that Senator Archer has raised it in this chamber previously. Contrary to some emotional feelings about it and to some beliefs about it, the fact of the matter is that a number of companies which have invested overseas-it is not only the Australian experience but also the international experience-have, as a result of those investments, strengthened their operations here in Australia. I am not talking about fly-by-night companies which flit between Australia, the Philippines and Singapore, and things of that kind; I am talking about companies which have substantial operations here and invest in manufacturing operations overseas. The first point I make about that is that sometimes it is highly desirable and necessary that they do so in order that they might involve themselves in international markets.

Senator Watson —Your tax policy is discouraging them.

Senator BUTTON —The tax policy is not discouraging them. The honourable senator does not know about that, any more than do some of the outside critics. There has been a lot of empty-headed rhetoric about that, and I am surprised that the honourable senator rushes in to join it.

Going back to Senator Archer's question, the fact of the matter is that not only has overseas investment strengthened companies' international operations and enabled them to obtain economies of scale in the international market, but it inevitably has had the effect of strenghtening their local operations, because most of those firms in the manufacturing sector which have established successfully overseas have an integration with the parent activity in Australia and inevitably technology, equipment and so on is supplied from this country. If Senator Archer is interested in pursuing this question, I would refer him to the research paper of the Bureau of Industry Economics, which was published last year, I think, on Australian investment overseas by manufacturing companies and the consequences which they saw from that process. I also make the point that the same paper drew the conclusion that by international standards it was not high.