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Wednesday, 16 August 1972
Page: 254

Mr BURY (Wentworth) - As the honourable member for Melbourne Ports (Mr Crean) pointed out, this Bank is concerned with 2 different branches of activity. One deals with the special funds which, put in another way, are the soft touch to our weaker brothers. We have subscribed quite generously in the past to this sort of aid. However, this measure deals not with the charitable aspects, valuable as they are, but with the Bank's ordinary loan operations. One of its most important roles is to act as a bank for this area to develop and encourage proper banking and investment practices and to equip and familiarise as many people from this area, official and unofficial, with the workings of banking and finance so that the processes of economic advancement may be speeded up.

We come to this measure largely because of the very success of this institution. It has been successful and we should congratulate those concerned, particularly one of its great sponsors, Mr Watanabe, the present executive head. In 1971 the Bank had a sudden big success in raising money by loans on the world's markets. What it wants this money for and what our subscription is being paid for essentially is not so much to provide money for operations as to give it the credit and capacity to borrow funds on its own in the markets of the world. The Bank started quite assiduously to borrow money in 1969 and since the end of 1969 it has borrowed a total of $159. 8m. The rush which occurred in 1971 enabled it to borrow $121m out of that total of roughly $160m. It became obvious that the Bank was doing so much business and making so many loans that unless it could raise further funds it would gradually have to slow down and be unable to carry on in this way. This was raised to the Board of Governors in 1971, which took due notice and asked the Board of Directors to report on what measures should be taken. The Board of Directors has since presented its report to the Governors. It advised that as the Bank was operating its funds for investment would be exhausted by the end of 1973. We are one of the largest subscribers. This Bill will authorise us to subscribe a total of $127.5m. Of this sum only $25.5m is actually paid in. The purpose of the plan is to pledge Australia's credit because we give a promissory note to pay this sum if it is requested and needed. All that is paid in cash is $25.5m, 40 per cent in gold and 60 per cent in the domestic currency of the country concerned. In this way we add our share to the essential borrowing capacity in the markets of the world.

The Bank so far has issued its bonds and has sold its securities in Austria, Belgium, Japan, Switzerland, the United States of America and 12 countries in the region. The fact that Australia does not appear in this list should also give us food for thought. Like the honourable member for Melbourne Ports, I would not regard it as appropriate to enter tonight into a discussion of our current international payments position, but various impractical suggestions have been made in relation to our credit position about borrowing exchange and various other moves rather than using our position to promote what we should be thinking about - an Australian international finance industry. This thought should be followed up and I ask the Minister for Supply (Mr Garland), who is at the table, to convey to the Treasurer (Mr Snedden) that it ought to be followed up by opening the Australian markets to the bonds of the Asian Development Bank. These bonds have already been sold on a number of markets and Australia is a natural market in which the Bank should be able to operate. We should see day by day quoted on the Australian stock exchanges the bonds of the Asian Development Bank. I would like to see this development so that with governmental help the Bank would be enabled to raise funds in

Australia on its own account in our money markets because this is the fashion in which fundamentally Australia can help to develop the region. Incidentally, Australia's influence in the institution would be greatly increased.

Australia should be a big market in this area. It should be playing its part in development privately as well as through public institutions. This is the next step we should take. Quite obviously we are all agreed that we should subscribe. We should give the Asian Development Bank our support for its ordinary operations as well as its special operations and special funds. Our next step should be to open up our markets so that this worthwhile institution can sell its bonds here on its own business basis.

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