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Thursday, 24 August 1972
Page: 660

Mr ANTHONY (Richmond) (Minister for Trade and Industry) - I move:

That the Bill be now read a second time.

As announced in the Budget Speech, the Government has decided that the capital of the Export Payments Insurance Corporation should be increased from $4m to $8m. The purpose of this Bill is to give effect to that decision. The last increase in the capital of the Corporation was in 1965 when it was increased from $2m to the present level of $4m. Since then there has been a substantial increase in the business being written by the Corporation and, as a result, there has been a corresponding increase in its contingent liabilities. The face value of business underwritten has increased since 30th June 1965 from $160m, with contingent liabilities of $83m, to a face value of $622m with contingent liabilities of $375m as at 30th June 1972. These figures clearly show the rapid growth of the Corporation's business. They illustrate the important role being played by the Corporation in assisting exporters, through the provision of a specialised range of payments insurance facilities and guarantee facilities, in expanding and developing overseas markets.

Although the liabilities of the Corporation are fully guaranteed by the Commonwealth, the Corporation is charged to conduct its affairs on a commercial basis. It is appropriate, therefore, that the Corporation should have sufficient capital to support the growth in its business. The Corporation has estimated that its contingent liabilities will increase by at least $45 m per annum over the next 3 years. In order to establish and preserve a ratio of reserves to liabilities which would provide a reasonable basis for the Corporation to support its growing business, it is considered that an increase in capital of $4m is necessary to enlarge the reserves available to the Corporation. I commend the Bill to honourable members.

Debate (on motion by Mr Crean) adjourned.

Sitting suspended from 12.44 to 2.15 p.m.

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