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Thursday, 17 August 1972
Page: 366

Mr PEACOCK (Kooyong) (Minister for External Territories) - We oppose the amendment. We do so because, with respect. I do not think my second reading speech has been read in sufficient detail; otherwise there would be no need for this amendment. May I very succinctly say what we have done in regard to this investment or what the Investment Corporation of Papua New Guinea has done. I made my announcement on 9th May and it was accepted then by the Opposition through the Leader of the Opposition (Mr Whitlam). I said that the Commonwealth Government had approved the sale of the Commonwealth's 50 per cent shareholding in Commonwealth New Guinea Timbers Ltd to the Investment Corporation of Papua New Guinea. That 50 per cent shareholding was transferred to the Corporation. A condition of the sale of the Commonwealth's interest in New Guinea Timbers was that upon transfer of the shares to the Investment Corporation, the other major shareholder, Placer Development Ltd, would arrange amalgamation of all its other interests in the fields - mining. mineral resources, mineral exploration and cattle breeding - and bring them together in the one amalgamated larger company to be known as Commonwealth New Guinea Timbers Ltd, and in that context of a much larger cake, if you like, the interest would be divided 65 per cent to Placer

Development Ltd and 35 per cent to the Investment Corporation.

I can say that at the time of the sale agreement negotiations the agreed net book value of Commonwealth New Guinea Timbers Ltd was $3. 2m. It was then to be owned 50 per cent by the Investment Corporation and 50 per cent by Placer Development Ltd. The amalgamation of other Placer subsidiaries in Papua New Guinea, valued at $2. 5m, into a new consolidated Commonwealth New Guinea Timbers Ltd, gave a total net book value of $5.7m of which the Investment Corporation's overall share was 28 per cent.

As a result of complex financial considerations it was agreed that the Investment Corporation would receive 35 per cent of the share equity in the new Commonwealth New Guinea Timbers Ltd in return for the surrender of certain Commonwealth New Guinea debenture stocks held by the Investment Corporation as a result of the amalgamation of Placer interests. The overall result will be greater profitability for the Investment Corporation and therefore greater benefits to the people of Papua New Guinea.

In conclusion, referring to the point about Japanese investment, I think we have to face the fact that as the pace of development in Papua New Guinea quickens and the search for export markets widens, we must expect a corresponding diversification in Papua New Guinea's sources of supply. It cannot simply be from Australia. I know that the honourable member for Fremantle (Mr Beazley) is well aware of this fact. I think that in the year ended 30th June 1971 Japan supplied 17.2 per cent of Papua New Guinea's imports, the United States of America supplied 11.4 per cent, the United Kingdom supplied 3.9 per cent and Australia supplied 51.2 per cent.

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