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Thursday, 14 September 1972
Page: 1388

Mr MacKELLAR (WARRINGAH, NEW SOUTH WALES) - My question is directed to the Treasurer and I preface it by saying that a number of my constituents have expressed concern to me that the Government's position in relation to the acceptability of overseas portfolio investments in Australian companies is unclear. Provided such investment does not lead to acquisition or control of Australian companies, does the Government consider such overseas portfolio investment acceptable or not?

Mr SNEDDEN (BRUCE, VICTORIA) (Treasurer) - The term 'portfolio investment' is a very broad ranging one. It covers a variety of different forms of paper that evidence an entitlement to money. But I think the honourable gentleman was relating the term to the purchase of shares on the stock exchange. It is important to draw the distinction between portfolio in the broad and shares on the stock exchange. It is also important to draw a distinction between actions which are designed to achieve control and actions which are designed to achieve a share of ownership through the stock exchange. We have a policy in relation to the purchase of shares on the stock exchange which does not erect any barriers to those purchases because, almost by definition, they are directed towards achieving ownership and not towards achieving control. Normally a takeover is made under the provisions of the Companies Act and is clearly designed as a takeover for the purpose of assuming control. I have been giving very close consideration to that matter and the Government is now considering certain papers which I have put before it.

However, I should like to make it clear that I have no recommendations in relation to portfolio investment in the form that the honourable gentleman mentioned, that is, the purchase of shares on the stock exchange. But if that purchase of shares is, to use the terminology, the action of a raider using the stock exchange to acquire control, that would be an entirely different matter and would have to be looked at in terms of a takeover seeking control. To return to the initial point made by the honourable gentleman, I have no recommendations whatever which would interfere with or put obstructions on the free flow of equity investments through the stock exchange from persons in overseas countries whose purpose was to achieve some ownership in Australia through the stock exchange in order to spread their portfolio interest in those areas where they believe that their equity capital would be well invested.

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